Market Action Summary: 12/3/18


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S&P 500 Overview: Careful Near Top of Range

  • Top of channel forming near 2800 after best week in 7 years.
  • S&P 500 stochastic overbought, last 3% over 10DMA.
  • Jumble of moving averages suggests a period of neutrality.
  • Good news priced in, with few clear positives in near term.
  • Amount of downside unclear. May not be a full retest. Watch for potential triangle with higher low above 2650.
  • Now’s the time to focus back on individual stocks.

Health Care Still Gaining Favor

  • XLV the top SPDR fund in last month despite lagging today.
  • Big pharma bullish chart patterns: PFE MRK AMGN
  • Viewed as beneficiary of mid-term elections
  • Myriad value opportunities in key names: BHC, CAH, AGN, ABC, WCG, CELG
  • Safe haven amid trade uncertainties.

From the Blog:

Don’s Watch For Tomorrow:

  • Pre-market: Dollar General (DG) reports in the pre-market.
  • Pre-market: Autozone (AZO) reports in the pre-market.
  • Post-market: Marvell Technology (MRVL) reports in the post-market.
  • Post-market: Toll Brothers (TOL) reports in the post-market.
  • Post-market: At Home (HOME) reports in the post-market.

Russell’s Watch List:

  • Micron Technology (MU) rebounding from 2014 support level.
  • Tesla Motors (TSLA): Golden cross amid signs of transformation. Watch for potential acceleration from range.
  • Fiat Chrysler (FCAU) may resume longer-term uptrend amid SUV strength.
  • Lending Tree (TREE) may result longer-term uptrend.
  • Homebuilder ETF (ITB) coming off low, pushing 50-day MA.
  • Ulta Salon (ULTA) has breakout potential.

Options recap:

Upcoming Events:

  • 12/5: Market Closed. Congressional appearances of Powell, GOOGL’s Pichai to be rescheduled.
  • 12/6: OPEC
  • 12/7: Non-farm payrolls
  • Next week: Potential Brexit vote in Parliament, ECB
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David Russell is Global Head of Market Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.