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S&P 500 Overview: Rebound Possible as Range Holds
- Channel between 2640ish and 2800ish.
- Index swings from best week in seven years to worst week since March.
- We don’t know worst-case scenarios will play out with China. Still have months before trade talks run out of time.
- Waiting for @ES 50-hour MA confirmation potentially the best course.
- Economy not clearly a negative yet. Brexit an added uncertainty. Market is holding its breath with potential for push toward 2500 or rebound.
- Break under 2620ish could trigger more selling.
Workspace of the Week: Momentum Pullbacks
- Finds potential bullish flags by spotting 6-month winners that are down in the last week.
Don’s Watch List:
- Pfizer (PFE) may hike dividend this week.
- Abbot Laboratories (ABT) strong dividend history.
- Tomorrow afternoon: Dave & Busters (PLAY), American Eagle (AEO) report tomorrow afternoon.
- Thursday afternoon: Adobe Systems (ADBE), Costco (COST) report.
News of Note:
- October semiconductor sales have smallest gain since December 2016, up 12.7 percent.
- CNBC: Hedge Funds swap from Tech, Media to Utilities, Health Care.
- Paul Tudor Jones, Natixis, Ned Davis: More downside in S&P 500.
- Bank of France halves Q4 GDP estimate.
- Last week’s initial jobless claims worst since July, rail traffic slowing.
- Safe havens, including REITs, and pharma still outperform as risk-on sectors struggle.
Fed in Focus:
- WSJ: Fed may go “data dependent” after Dec. 19 meeting.
- Raphael Bostic swings from hawk to dove.
- James Bullard suggests no hike in December.
- ECB expected to end stimulus on Dec. 13 but may float new policies.
- Goldman Sachs changes view, ruling out March rate hike.
Russell’s Watch List:
- Tesla Motors (TSLA): Golden cross as analysts turn more bullish.
- Software makers like SPLK, CRM, VEEV, TTD, OKTA DATA, even MSFT relatively unscathed by selloff in Tech.
- TWTR in narrow range, outperforming other Tech/Nasdaq.
- HOLX pulls back following revenue beat.
- PFE, LLY, VZ holding 50-day MAs.
- DECK, ETSY under-the-radar retail names.
Options Recap:
- Today: XLE 28-Dec 63.50 – 28-Dec 66 call spread bought for $0.79, on 11,000 contracts.
- Today: EEM December 36 short puts rolled → February 36 for $0.56 net credit.
- Dec. 4: SPY 28-Dec 286 – 28-Dec 287 bullish call spread bought for $0.10.
Coming up:
- Brexit news possible any morning.
- Tuesday: GOOGL CEO Pichai in Congress
- Wednesday: Oil inventories.
- Thursday: ECB early, China industrial/retail/investment data late
- Friday: Retail sales
