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Sizing Up the S&P 500

  • S&P 500 makes lower weekly high at post-Fed gap
  • Outside days on 10/12 and 10/17 are potential reversal patterns
  • 8-day EMA fails to cross above 21-day EMA (short term)
  • 20-, 30-, 50-day moving averages all falling (intermediate term)
  • Price stalls below 100-day MA (long-term)
  • Combination of higher for longer and geopolitical risk may pressure valuations

Key News

  • Retail sales beat for 3rd straight month, boosting rate outlook
  • Airlines drop as United Airlines (UAL) warns of fuel costs, global tensions
    • CEO Scott Kirby to CNBC: Business models must change to survive as labor costs rise
  • Apple’s pair of bearish analyst notes
    • Jefferies: iPhone loses leadership in China to Huawei / Android
    • Ming-Chi Kuo: MacBook demand down “significantly” in back-to-school season
  • Chips fall on Biden Administration China trade restrictions
    • Lam Research (LRCX) falls on mixed guidance
  • Housing struggles:
    • NAHB homebuilder sentiment drops more than expected to lowest since January
    • Mortgage purchases applications -6% as 30-year mortgage tops 8% for first time since 2000
  • Morgan Stanley: Engagement growing for Meta Platforms’ (META) Reels among Facebook, Instagram users.
  • Tesla (TSLA) earnings, revenue miss estimates as operating margin narrows from 17.2% to 7.6%.
  • Netflix (NFLX) subscribers, earnings beat amid password crackdown.
S&P 500, daily chart, with key indicators and patterns.

Sector Watch

  • P&C insurers rally amid strong premiums, safe-haven status: PGR, ALL, ACGL
  • Energy: Wildcatters, oil tankers outperform
    • Wildcatters: SM, CPE, MGY
    • Tankers: DHT, FRO, TNK
  • Diabetes-related stocks under pressure: DVA, DXCM, BAX, PODD
  • Airlines fall as oil rises, global tensions mount
  • Semiconductors fall amid trade worries
  • Chinese tech stocks under pressure

Signals Scan

  • Gold futures (@GC): Potential weekly breakout
  • (AMZN) stalls under 21-day EMA, 50-day MA
  • JPMorgan Chase (JPM) potentially stalling at 50-day MA
  • Rivian Automotive (RIVN) potentially breaking 200-day MA
  • Bank of America (BAC) near top of Keltner Channel
  • Fintechs: Potential downtrends starting in SoFi Technologies (SOFI), Affirm (AFRM)
  • Sea (SE): Potentially stalling in bearish gap

Mover of the Week: Diamondback Energy

  • Shale-oil producer active near Midland in central Texas
  • Has rallied since Exxon Mobil (XOM) acquired peer Pioneer Natural Resources (PXD)
  • FANG +24% YTD

Upcoming Events

  • Tomorrow (10/20): Harker of Fed to speak
    • Earnings: AXP, SLB
  • Tuesday (10/24)
    • Pre-market earnings: GM, HAL
    • Post-market earnings: MSFT, SNAP, TXN, V
  • Wednesday (10/25): New home sales, crude-oil inventories
    • Pre-market earnings: BA, TMUS
    • Post-market earnings: META, NOW, IBM
  • Thursday (10/26): GDP, jobless claims, durable goods
    • Pre-market earnings: MA, RCL, CMCSA

Security futures are not suitable for all investors. To obtain a copy of the security futures risk disclosure statement Investment and Trading Disclosures Booklet – Futures. Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.

Options trading is not suitable for all investors. Your TradeStation Securities’ account application to trade options will be considered and approved or disapproved based on all relevant factors, including your trading experience. See Characteristics and Risks of Standardized Options.

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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.