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Sizing Up the S&P 500

  • S&P 500 rebounds from mid-May weekly support.
  • Current bounce may lead to August low or falling trendline.
  • Several potential levels at play in difficult range-bound environment.
  • 1-2 weeks of consolidation may be needed to break intermediate-term downtrend.
  • 10-year Treasury yield may provide clues on market direction.
S&P 500, daily chart, with key patterns and indicators.

Key News

  • Fed makes little changes in latest meeting.
  • Treasury to increase the size of long-bond auctions slightly less than expected.
  • ADP private sector payrolls grow less than expected, wage increases (changers and stayers) at 2-year lows.
  • October ISM manufacturing misses as orders, employment fall.
  • EIA crude oil inventories rise less than feared. Reuters says refiners are worried about lower gasoline demand.
  • Consumer confidence beat estimates in October for the 1st time since July. Respondents more optimistic about selves than others.
    • Consumer sentiment was also unexpectedly revised up.
  • August Case Shiller home price index rises 1% vs 0.7% estimate.
  • Tom Lee of Fundstrat: Stocks could break “doom loop.”
  • Odds of 12/13 rate hike drop from 29% to 22.5% after Fed meeting.
  • Reuters: INTC, AMD results suggest PC market is recovering
    • Echoes 10/9 report by Gartner
  • Jeffrey Gundlach of DoubleLine Capital sees rates falling as economy slows

Sector Watch

  • REITs rebound, following utility bounce, amid hopes that yields have peaked
  • Homebuilders trying to bounce as yields inch lower
  • Latin American stocks trying to stabilize after August declines
  • Energy continues to lag
  • Precious metals weak despite lower rates. Less fear?

Signals Scan

  • Lululemon Athletica (LULU) holds 50-day MA
  • Palo Alto Networks (PANW) holds 50-day MA
  • Dell Technologies (DELL) holds 50-day MA
  • Occidental Petroleum (OXY) potentially breaking 200-day MA
  • Coca Cola (KO) hits falling 50-day MA 
  • Will crude oil futures (@CL) make a lower low after 10/20 lower high?

Mover of the Week: Deckers Outdoor

  • Maker of UGG, Teva footwear
  • Benefiting from direct-to-consumer model after embracing Google Marketing Platform
  • Jumped to new record high after earnings, sales and guidance beat estimates on 10/26
  • DECK +49% YTD

Upcoming Events

  • Earnings tonight: AAPL, MNST, FTNT
  • Tomorrow (11/3): Non-farm payrolls
  • Next week: Fedspeak resumes
  • Wednesday (11/8): Crude oil inventories

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