Market Action Summary: 9/17/18


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S&P 500 overview

  • SPX finds support at old resistance. Outside day provides confirmation.
  • Transports have broken out. Only DJIA remains below January peak.
  • Conditions favor individual stocks over indexes.

Don’s Watch List:

  • FedEx (FDX): Reports this afternoon amid strong economy, earnings.
  • Micron Technology (MU): Earnings Thursday night. Has a history of beating estimates and has now given up most of its gains for the year. Good for options.
  • General Mills (GIS): Clawing back from two-year lows amid strong economy.
  • AutoZone (AZO): Reports tomorrow morning amid strong earnings momentum, bullish Wall Street sentiment.
  • Darden Restaurants (DRI): Reports Thursday morning. Near record high amid strong earnings backdrop.

Russell’s Watch List:

  • CSCO has bullish-continuation potential. Good for options.
  • Glu Mobile (GLUU) has bullish-continuation potential.
  • Starbucks (SBUX) downside risk after dojis, hanging man.
  • Square (SQ): Potentially bearish candle today.
  • Defense stocks (RTN, NOC, LMT, GD) potentially coming to life.
  • Cruise ships (RCL, CCL, NCLH) potentially coming to life.
  • Target (TGT) on watch for bullish continuation. Good for options.
  • Watch for Zumiez (ZUMZ), Trinity (TRN), Greenbrier (GBX) for swings higher.
  • Will Florence hurt restaurants/airlines, but help automakers?

Options Corner:

  • GPRO 28Sept 6.50 calls bought
  • CI Jan 220 calls bought
  • F Jan20 10 calls bought
  • AVGO Sept 225 calls sold
  • Options 101: Going ‘In the Money’
  • Do you know about our Options Starts 2018 symposium in Chicago next month?

Economic Watch:

  • Bearish: David Tepper, Ray Dalio: Economic expansion in late stages.
  • Bullish: GS sees no recession for at least 3 years. BAML says low-income consumers gaining faster.
  • Russell: Goldilocks going strong amid weak inflation, low jobless claims.

Events to Watch:

  • China trade angst all week.
  • Wed 9/19: Housing starts, building permits.
  • Mon 9/24: Tech sector to be split for communications index.
  • Wed 9/26: FOMC to hike rates?
  • Thur 9/27: Durable goods, GDP final revision.
  • Next Week: TradeStation Master Class in Florida.