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Market Recap – Wednesday, November 7th 2018

November 7, 2018

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MARKET SNAPSHOT
Dow26180.30+545.29(2.13%)
Nasdaq7570.95+194.79(2.64%)
SP 5002814.03+58.44(2.12%)
10-yr Note-2/323.224
NYSEAdv 2260Dec 713Vol 886.7 mln
NasdaqAdv 2091Dec 994Vol 2.6 bln
IN THE NEWS HIGHLIGHTS:
  • U.S. midterm elections result in an expected split Congress; ends uncertainty.
  • Renewed strength in the information technology sector.
  • Health care stocks rise with the unlikelihood that a divided Congress will fully repeal the Affordable Care Act.
  • Amazon (AMZN) leads consumer discretionary sector with a strong gain. 
  • Crude oil sells off following EIA inventory report.
  • U.S. Dollar rallies back from early selloff.

 

RECAP– The markets roared higher today following last night’s election results in which the Democrats took over the House of Representatives and split Congress between the two parties. Crude oil continued to sell off as it hit a new intraday low of $61.50. The US Dollar rallied back from an early selloff to close slightly under 96 on the Dollar Index with support being breached.

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

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


Economic Calendar

Today

  • November 7: Crude Oil Inventories – Actual: 5.8M Forecast: 2.0M Previous: 3.2M
    • Crude oil sold off heavily following a larger than expected surplus in supply.

 

Upcoming Reports

  • November 8: Unemployment Claims
  • November 8: FOMC Statement
  • November 8: Federal Funds Rate
  • November 9: PPI m/m
  • November 9: Core PPI m/m

 

FedWatch November 8 Rate Hike Probability for November 7:  7.2% (View the probability chart here)


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

  • RSI is below 50 signifies a condition of bearishness.
  • On Balance Volume is below its moving average.
  • The market has broken its medium to long term bullish run earlier in the month. It is currently in a short to mid-term bearish run.
  • The market had a fierce rally today carrying bullish momentum well into the closing bell.

 


A Look Into the Heat Map

The market was generally very bullish among all sectors.

(click on symbol for chart)
SPX – Bearish 
DOW– Bearish
Nasdaq– Bearish
Russell – Bearish

VIX – 16.38

COMMODITIES

Oil (USO)Bearish – Crude oil is breaking down and it looks like $60 is the next major level of support.
Ag (DBA)Bearish – DBA has been consolidating for the past few weeks.
GLD Bearish  
SLVBearish 

THE DOLLAR

UUP USD weighted ETF – Bullish

 


SOLON’S TRADING THOUGHTS

The markets had a very bullish response following yesterday’s election. I would expect that momentum to carry over into the next trading day base on how strong it is and the lack of contradicting internal indicators. It is important however to look out for tomorrow’s FOMC statement as monetary policy has been becoming increasingly hawkish and a tighter monetary policy is a sign of future bearishness. If anything has the power to reverse today’s bullish momentum, it would be the Federal Reserve (hence the phrase, “Don’t fight the Fed”). Another thing to be mindful of, the market is two thirds of the way through a textbook inverted Head and Shoulders pattern. It’s very possible that the market stalls between here and 2850 before selling off again briefly. The rally over the past 10 days has been strong and a pullback would not be at all surprising.


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