Market Action Summary: 1/7/19


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S&P 500 Overview: Consolidation Likely

  • S&P 500 3%+ above 10DMA (overbought) despite bearish momentum
  • Sentiment better, especially with new quarter and lower volatility
  • Retest of 2500 or 2450 possible
  • Near-term geopolitical risk with China, Trump speech tomorrow night
  • Earnings still 1-2 weeks away
  • Dec. 24 low is possible bottom, resulting from thin holiday markets

Small Companies in Focus as Calm Returns

Europe Coming to Life?

  • Euro rising as Italy gets budget in order
  • Europe benefits from cheaper oil
  • November retail sales, German construction spending strong
  • Dovish Fed may lift @EC

Breakdown of Strong U.S Economy

Workspace of the Week: Countries Above/Below 50-day MA

  • Customizable for other symbols or other indicators.
  • Track a list for symbols starting to outperform or underperform.
  • Click here for more on the rally in Brazilian stocks.

Pratl’s 2018 Review List:

  • Merck (MRK), Pfizer (PFE)
  • Cisco Systems (CSCO), Verizon (VZ)
  • Coca-Cola (KO), Procter & Gamble (PG)
  • Chevron (CVX), Exxon Mobil (XOM)
  • International Business Machines (IBM), General Electric (GE) were big losers.

Russell’s Watch List:

  • Homebuilders ETF (ITB) pushing through 50-day MA, have bullish divergence at key support line. Reports next week (starts, NAHB)
  • Twitter (TWTR) in channel: $25 – $36
  • Small growth stocks returning to favor: TWLO, OKTA, COUP, ETSY, CRM, SPLK
  • These have had deeper pullbacks: NEWR, SHOP, WIX, TREE, CVNA, PAYC, HUBS
  • Some long-term pullbacks in biotechnology: EXAS, VKTX, IMMU, EXEL
  • Revisiting old IPOs: PS, DOMO, ZS, SPOT, IQ, HUYA
  • Gold miners (GDX), Glu Mobile (GLUU) in ascending triangles
  • Watch MAT, SJM, GIS rebounds for potential shorts
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David Russell is VP of Market Intelligence at TradeStation Group. 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.