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Sizing Up the S&P 500

  • S&P 500 remains below old support around 4330
  • Holding above 4200, 200-day MA, with potential for continuation below
  • Support potentially near May 24 low of 4100
  • 9/27 hammer violated, confirming downtrend
  • Selling climax / capitulation may still be coming
  • Number of new 52-week lows climbing back to October 2022 levels
  • Macro events may dominate:
    • Payrolls (tomorrow)
    • Fed minutes (10/11)
    • CPI (10/12)
  • Treasury yields, U.S. dollar driving price action in stocks
    • Traders potentially waiting for 10-year note to hit 5.25%
S&P 500, daily chart, with key patterns and indicators.

Key News

  • ISM manufacturing beats estimates, price index cools
  • Reuters: Shippers are winning price cuts from FedEx, UPS amid soft demand
  • Mortgage demand falls to 27-year low
  • ADP private-sector payrolls miss estimates
  • Strategic action: Intel (INTC) to spin off Programmable Solutions Group over next 2-3 years
  • Crude-oil inventories shrink more than expected, but gasoline rise sharply.
  • More signs of potential clean-energy fading:
    • Germany approves reactivating coal plants this winter
    • Larry Fink: Energy transition can’t happen unless costs fall
    • U.S., Europe missing wind-power targets
    • IMF warns energy transition could sharply increase public debt

Sector Watch

  • Technology, communications show relative strength in the past week
  • Coal stocks outperform in past month: CNX, AMR, BTU, CEIX, ARCH, HCC
  • Contract manufacturers like JBL, CLS outperforming
  • Utilities, REITs, financials lead to downside. All have interest-rate risk

Signals Scan

  • Cameco (CCJ) tests 50-day MA
  • Intuit (INTU) holds 50-day MA
  • Helix Energy Solutions (HLX) bearing 50-day MA (offshore oil & gas)
  • CME (CME) holding $200 (post-earnings level, late-August low)
  • Marathon Petroleum (MPC) holds August lows around $140
  • AT&T (T), SL Green (SLG) potential bearish flags
  • Freeport McMoRan (FCX), Alibaba (BABA): descending triangles

Upcoming Events

  • Tomorrow (10/6): non-farm payrolls
  • Wed (10/11): PPI, Fed minutes
  • Thu (10/12): CPI

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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.