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Sizing Up the S&P 500

  • S&P 500 trendline breakout improves weekly technicals.
  • Potential resistance around 4500-4515:
    • Weekly peak from late April 2022
    • September 2021 high
    • Monthly highs for August, September of this year
  • Potential support around 4444 (September 19 close)
  • RSI nearing overbought. Stochastics are overbought.
  • Numbers of S&P 500 members above 20-, 50-day MAs rising. (This historically marks beginning of positive move.)
  • Potential for tight consolidation between 4444 and 4515
  • Soft landing belief spreads. Broader sentiment improvement may last into election year.
S&P 500, daily chart, with key patterns and indicators.

Key News

  • October CPI 0%, core +0.2%. Both 0.1 point under estimates. Shelter, vehicles ease.
  • October PPI -0.5% vs -0.1% est. m-o-m change was lowest since April 2020.
  • October Retail sales beat estimates for 4th straight month.
  • November Empire index: shipments improve, delivery times and orders fall. (Consistent with lower inflation.)
  • China industrial production beats estimates as PBoC adds stimulus
  • Austan Goolsbee (Chicago Fed): U.S. could have record peacetime drop in inflation
  • Tom Lee of Fundstrat: Stock breadth to widen as shelter drop breaks inflation trend.
    • Likes small caps, Nasdaq, industrials
  • Max Kettner of HSBC: Consensus earnings are too low for S&P 500
    • (Earnings estimates for 2023 have risen for 4 straight weeks.)
  • S&P Global Risk Appetite Index to highest in about 2 years on Fed pause optimism.
  • Tech news:
    • Intel (INTC) upgraded by Mizuho on PCs, data center.
    • Cisco Systems (CSCO) cuts revenue guidance as orders weaken
    • Palo Alto Networks (PANW) cuts billings outlook
      • Follows weak report by cybersecurity peer Fortinet (FTNT)

Sector Watch

  • Housing, regional banks rebound as rates fall.
  • Chips, tech recover before Biden-Xi meeting.
  • Airlines, solar energy bounce from major selloffs
  • Groups with year-to-date relative strength:
    • Electronic manufacturing: CLS, JBL, FLEX
    • Bulk materials: CX, JELD, CRH, MLM
    • Private-equity: KKR, BX, APO
  • Health care, energy lag

Mover of the Week: GoDaddy

  • Web-hosting company beats estimates amid cost cuts, buybacks
  • Nearing top of 5-year consolidation range
  • GDDY + 22% YTD, with all of gain in the last two weeks

Upcoming Events

  • Earnings tonight: AMAT, GPS
  • Fri 11/17: Housing starts / Building permits
  • (Next week data shift for Thanksgiving)
  • Tues 11/21: Fed minutes
    • Pre-market earnings: LOW, BIDU, BBY, ADI
    • Post-market earnings: NVDA, HPQ
  • Wed 11/22: Jobless claims, consumer sentiment, durable goods
    • Pre-market earnings: DE
  • Thur 11/23: Thanksgiving
  • Fri 11/24: OPEC meeting, 1pm market close.

Using the Platform

Scanning for “non-index runners”:

  • Symbol Universe tab:
    • Symbols to Include: All Stocks
    • Symbols to Exclude:
      • TradeStation Symbol Lists → Index Components → S&P Indexes → S&P 500 Index
      • TradeStation Symbol Lists → Index Components → Nasdaq Indexes → Nasdaq 100 Index
  • Scan Criteria tab:
    • Price → % of 52w Wk High/Low > 75
    • Price → %Chg → %Chg(5day)<100
    • Price → %Chg → %Chg(10day)<100
    • Indicator → Days Since 52wk HL (High) < 10
    • Indicator → Industry <> “”
    • Volume → Vol Avg (10 day) > 250000
      • Optional
    • Capitalization → Market Capitalization (Mil) > 1000
      • Optional

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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.