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Market Recap August 16, 2017

August 16, 2017

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MR

 

MARKET SNAPSHOT
Dow22024.87+25.88(0.12%)
Nasdaq6345.09+12.10(0.19%)
SP 5002468.07+3.50(0.14%)
10-yr Note+14/322.226
NYSEAdv 1802Dec 1140Vol 731.0 mln
NasdaqAdv 1583Dec 1198Vol 1.8 bln

 

 

IN THE NEWS HIGHLIGHTS:

  • FOMC Minutes seen as relatively dovish, show concerns over lull in inflation.
  • President Trump ends his Manufacturing Council and Strategy & Policy Forum.
  • Target (TGT), Urban Outfitters (URBN) influence retailers higher after earnings.
  • Crude oil drops despite EIA report.
  • US dollar re-tested 94, resistance holds.

 

RECAP– The markets closed slightly higher on the day, but was mostly characterized by sideways trading. Crude oil lower on the day despite an EIA inventory report which indicated a greater than expected decrease in oil supplies. The US dollar re-tested resistance of 94 before closing lower.

In-depth look of daily news at Briefing.com (CLICK HERE)

In-depth look at after hours movers (CLICK HERE)


Economic Calendar

Today

  • August 16: Building Permits – Actual: 1.22M  Forecast: 1.25M  Previous: 1.28M
    • Building permits came in lower than expected, but was offset by the revision to last month’s figure. Building permits granted is a leading indicator for future construction which serves as a boost for the economy.
  • August 16: Crude Oil Inventories – Actual: -8.9M  Forecast: -3.0M  Previous: -6.5M
  • August 16: FOMC Meeting Minutes

 

Upcoming Reports

  • August 17: Unemployment Claims

 

FedWatch September 20 Rate Hike Probability for August 16: 1.4% (View the probability chart here)


A Look At The S&P 500 Chart – KEY Levels

  • RSI is above 50.
  • On Balance Volume is below its moving average.
  • The market closed slightly higher as it consolidated into the close.

 


A Look Into the Heat Map

The market was broadly bullish today (although not convincingly) with Basic Materials being an outlier following the selloff in oil.

 

(click on symbol for chart)
SPX – Bullish
DOWBullish
NasdaqBullish
Russell Bullish

VIX – 11.74

COMMODITIES

Oil (USO)Bullish – Crude oil is retracing following its previous rally as it has hit resistance of $50.
Ag (DBA)Bearish
GLD Bullish
SLVBearish

THE DOLLAR

UUP USD weighted ETF – Bearish

 


SOLON’S TRADING THOUGHTS

The release of the FOMC meeting minutes did not unveil anything surprising. The Fed is grappling with the lack of inflation despite relatively low unemployment. The other major topic on hand is the Fed proceeding with reduction of their balance which is set to take place in the near future.With the combination of low inflation and balance reduction, it is expected that the Fed will remain somewhat dovish and not raise rates too aggressively.

Volatility spiked late last week. It shows you how the market can turn out of nowhere with volatility reentering the market. As the VIX gets lower with the market recovering, it would make more sense to buy puts again. With support being broken last week, the market can easily sell off again at a moment’s notice.


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