U.S. markets showed overall strength for a 4th-straight session while pushing fresh resistance and all-time highs.

The bullish tone comes ahead of low-level Sino-U.S. trade talks later this week and as the current bull market rally nears the record books.

Progress on the EU and NAFTA partner negotiations was also a bullish signal.

Wednesday’s FOMC Minutes from the Federal Reserve and Fed Chairman Jerome Powell’s speech on Friday remain the wild cards.

The Russell 2000 surged 1.1% after trading to a record high of 1,722. Fresh resistance is at 1,725-1,740 on continued strength.

The Nasdaq rose 0.5% following the midday run to 7,897. Key resistance at 7,900 held with a move above this level getting fresh all-time highs north of 7,933 in play.

The Dow climbed 0.3% while making an intraday push to 25,888.

Lower resistance at 25,800-26,000 was cleared with a move above the latter being a more bullish development.

The S&P 500 gained 0.2% following the run to 2,873 and fresh record high.

Lower resistance at 2,850-2,860 held with continued closes above the latter keeping 2,875-2,900 in focus.

Consumer Discretionary led sector strength after rising 0.8% while Industrials were up 0.7%.

Real Estate led sector laggards after giving back 0.9%. Utilities and Consumer Staples fell 0.7%.

Global Economy – European markets were mostly higher but remain near 3-month lows.

France’s CAC 40 rallied 0.5% and Germany’s DAX 30 advanced 0.4%.

The Belgium20 was up 0.3% while the Stoxx 600 Europe gained 0.2%. UK’s FTSE 100 slipped 0.3%.

UK August CBI trends total orders fell 4 to 7, weaker than expectations for a print of 8. The August CBI trends selling prices was up 2 to 15, topping forecasts of 14.

UK July public sector net borrowing dropped 2.9 billion pounds, missing estimates for a decline of 2 billion pounds.

Asian markets showed strength for a 3rd-straight session ahead of meetings between the U.S. and China that are set to resume on Wednesday.

While traders are optimistic that progress could be made in the talks to potentially avoiding a trade war, few expect the issue to be resolved.

China’s Shanghai rallied 1.3% while South Korea’s Kospi jumped 1%. Hong Kong’s Hang Seng rose 0.6% and Japan’s Nikkei climbed 0.1%.

Australia’s S&P/ASX 200 sank 1%.

In an interview, President Donald Trump said that he has no time frame for ending the trade dispute, and that he didn’t expect much from the talks.

The White House is also moving forward with tariffs that cover $200 billion in Chinese goods, including some that are to take effect this Thursday.

Trump’s statement could be seen as an under-promise followed by an and over-deliver by bullish traders while bearish traders are hoping for shaky headlines.

Redbook Store Sales were up 4.7% for the year in the week ending August 18th.

Market Sentiment – Dallas Fed Kaplan said the Fed has met its goals and should raise rates gradually to a neutral level, with three or four more hikes in the pipeline before that’s reached.

He added from there the Fed should step back and assess the outlook.

Kaplan sees GDP growth at 3% this year, while saying the yield curve suggests the U.S. is late in the economic cycle.

He plans to watch it closely as he mulls the pace of hikes and will also monitor global instability for any impacts.

The iShares 20+ Year Treasury Bond ETF (TLT) traded in negative territory throughout the session with the low tapping $121.07. Support at $121.25-$121 held. Resistance remains at $121.75-$122.

Market Analysis – The Spider Small-Cap 600 ETF (SLY) was up for the 4th-straight session after trading to a record high of $77.73.

Fresh resistance at $77.75-$78 held with blue-sky territory towards $80 on continued momentum.

Rising support is at $76.75-$76.50.

A move below $76 would suggest a possible short-term top with risk to $75-$73.50 and the prior trading range.

RSI is back in a nice uptrend and is approaching resistance at 70-75 with the latter representing June highs. Support is at 65-60.

The Spider Gold Shares (GLD) extended its win streak to 3-straight sessions while testing a session high of $113.10.

Near-term and lower resistance at $113-$113.50 held. Continued closes above $114 would be a more bullish signal a possible bottom is in.

Support is at $112.50-$112 with a move back below the latter getting fresh 52-week lows back in play.

RSI is in an uptrend resistance at 40.

Continued closes above this level would be a slightly bullish signal for a run towards 45-50. Support is at 35-30.

All the best,
Roger Scott.