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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
- IWM outperforming since Christmas, despite terrible 2nd half.
- Volatility just had biggest weekly drop since February
- Mergers back in the news
- Japan Yen surge on Jan. 3 looks like technical anomaly
- Careful of FANG becoming “source of funds”
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
- 12/18: GDP forecasts kept rising despite market volatility.
- 12/26: Disconnect between economy and stock market.
- 12/31: Superlative year includes best factory job growth since 1997, GDP over 4% for first time since 2014, record oil production, jobless indicators lowest since 1969.
- 1/4: Strong jobs & dovish Fed
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
