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Morning Market Report for Thursday January 18th, 2018

January 18, 2018

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The Morning Market Report is part of your 7 Step Process to Successful Trading by:

  • helping you start at the top of the markets,
  • choosing a trading strategy, and
  • finding and analyzing potential trades.

This report focuses on short-term swings in the market (especially overnight futures movements) that can help you best begin you trading morning. In this daily report, you’ll receive:

  • a summary of major market news,
  • the list of that day’s economic calendar,
  • information regarding the major markets indexes,
  • industry sector performance,
  • major commodities,
  • world currencies. and
  • links to useful sites and/or stories.

So don’t start trading uninformed; add the Morning Market Report to your daily routine.


Calendar


Economic News

  • Philly Fed Manufacturing Index Slips to 5-Month Low in January – The Federal Reserve Bank of Philadelphia said that its manufacturing index declined to 22.2 this month from December’s revised reading of 27.9. Analysts had expected the index to dip to 25.0 in January. Although now at its lowest reading in five months, the index has stayed within a relatively narrow range over the past eight months. Read More…
  • Bitcoin Rebounds after Falling below $9,500 in Cryptocurrency Crash – The price of digital currency bitcoin rebounded on Thursday after falling below the $9,500 level on Wednesday amid a selloff in cryptocurrencies sparked by fears over a regulatory crackdown. Prices fell as low as $9,231.0 on Wednesday, the weakest level since November 30 a fall of more than 50% from its December 17 peak of $19,891 on Bitfinex and more than $20,000 on other exchanges. Read More…
  • U.S. jobless claims fall to 45-year low – Initial claims for state unemployment benefits dropped 41,000 to a seasonally adjusted 220,000 for the week ended Jan. 13, the lowest level since February 1973, the Labor Department said on Thursday. Read More…
  • U.S. housing starts down sharply on drop in single-family units – U.S. homebuilding fell more than expected in December, recording its biggest drop in just over a year, amid a steep decline in the construction of single-family housing units following two months of hefty gains. Read More…

Major Index Futures

  • Market Overview – The the Dow Jones industrial average certainly led the way yesterday rising almost 1.3% for its biggest single-session gain so far in 2018. The S&P 500 rose 0.9%, topping the 2800 level for the first time. the Nasdaq rose 1.0%, and the Rut was up 0.95.
  • S&P 500 futures-  2,801 -bullish, yesterday broke out past 2800.
  • Dow 30 futures 26,106 – bullish, yesterday broke out past 26,000 decisively.
  • Nasdaq 100 Futures6,803– bullish, yesterday broke out past 6,800
  • SmallCap 2000 futures 1584 – slightly bullish, pushing up against strong resistance at 1600 but banks were lagging yesterday and held back the Rut
  • Charts Below are 2-Month Daily 


Commodities

  • All commodities are on a bullish rally in the last month especially as bitcoin and other cryptocurrencies have been on the retracement.
  • Gold – $1329 – slightly bullish, looking to try and break out past 1370, support at 1300
  • Silver -17.050 – slightly bullish, just had a  breakout past 17 but facing strong resistance past that price level.
  • Crude Oil – $63.95 – slightly bullish, broke out past 62.50, but facing a slowdown past that level,
  • Natural Gas – $3.179 – slightly bullish, broke out past 3 but facing a slowdown past that level, support at 2.8

 

  • Charts Below are 2-Month Daily


Sectors

  • Bearish Sectors – Utility stocks as tracked by (XLU) were not the only defensive sector that fell hard on Wednesday. Real Estate (XLRE) is the only other sector that is below the 50-day moving average.
  • Bullish Sectors – Energy (XLE) and Technology (XLK) are very bullish, so is Basic Materials (XLB).
  • The charts below show how the sectors did yesterday and the 5-day sector performance. 

  • The chart below shows the last 20 days of sector performance 
  • 2-month charts of key sector ETF’s

  • Key Industries ETF 2-month charts  
  • I like using industry ETF’s for investing in retirement accounts that don’t allow shorting or options.


Currencies

  • USD – $90.31 – bearish  – the dollar may be having a price breakdown. However, if the price does not continue to fall this might be a good time to play a short time bounce in a contrarian play. Listen to this week’s podcast to learn more about playing a reverse breakout/breakdown. Click Here for Podcast
  • The Charts Below are 3-Month Daily


  • Cryptocurrency 1-month Charts
  • Ripple’s XRP token was trading at $1.4 on the Poloniex exchange, after falling around 25% on Wednesday before recovering.
  • Crypto’s explained in 4 minutes Click Here…
  • Bitcoin – bearish – Bitcoin, which is known for sharp swings, has tended to rebound quickly from pullbacks. At current prices bitcoin has a total market capitalization of around $192 billion after around $30 billion was wiped off its market value by the price plunge. An analyst said “It has all the hallmarks of a classic speculative bubble, which we expect to burst. When it will fully burst is anyone’s guess and prices could yet rise again, before they fall further ahead”

  • Bitcoin Cash- bearish – Cryptocurrency prices plummeted late last week following reports that South Korea may be preparing to ban all virtual currency trading in the country. Analysts at Capital Economics said Thursday that the latest bitcoin price falls “suggest that the bubble is bursting” although because the price was still ten times higher than it was a year ago, it still had a long way further to fall.

  • Ethereum – slightly bullish, the world’s second largest cryptocurrency by market cap, is up from Wednesday’s low of $770.10.  Policymakers in South Korea once again indicated on Thursday that they are considering shutting down domestic cryptocurrency exchanges. The country is one is one of the largest markets for major coins like bitcoin and ethereum. Cryptocurrency trading in South Korea is highly speculative and digital currencies are often traded at a premium, meaning that they are priced significantly higher in the country’s exchanges than elsewhere in the world.

  • Litecoin – bearish – South Korea’s news this week follows drastic moves taken by China earlier, which is now trying to shut operations that produce bitcoin, a process known as mining. In a research note, analysts said the surge in the price was not being driven by any strategic world view but more a simple belief that it will continue to rise in value.


Tackle Trading 25

  • Welcome to the new Tackle Trading Covered Call List for 2018
    • For Slightly Bullish Trends
      Naked Puts, Covered Calls, and for stocks over $100 Bull Put Spreads
    • For Neutral Trends
      – Iron Condors are great for stagnant stocks
    • For Slightly Bearish to Trends 
      – deep-in-the-money covered calls or Bear Call Spreads for stocks over $100
    • (be careful with overly aggressive directional trades like Shorting or buying Puts)


Trading Thoughts

  • Slightly Bearish to Neutral Market Bias – I am expecting a mixed to weak opening for the market today. Thursday’s economic news got off to a mixed start and that along with concerns over a government shutdown today have investors worried. Today Republican leaders in the U.S. Congress have stepped up their efforts to pass a temporary extension in funding government operations and avert a shutdown, scheduling a vote on the measure for later Thursday. The government is operating on its third temporary funding extension since the 2018 fiscal year began on Oct. 1.
  • I Wish you the best in your trading and your life.

Bearish                                                      Neutral                                                       Bullish

-3                         -2                -1                                     +1                    +2                    +3

 


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Hector Duenas Jr. started his trading journey during the height of the tech bubble in 2001 as part of the 90% that loses money in the stock market.

A Rich Dad conference in 2016 changed his life and now he writes the Morning Market Reports, the Market Scoreboard, blogs, and appearances on the Coaches Show and the Cashflow Club for Tackle Trading. Hector specializes in cash-flow strategies such as Covered Calls on the Tackle 25 Watchlist, the Personal Gold System, Cashflow Condors, and speculating on Futures.

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