[MM_Member_Data name=’firstName’],

U.S. markets showed continued momentum to start the week with the Dow, S&P 500, and Nasdaq reaching fresh all-time highs throughout the session. The Russell 2000 also showed strength on the open but failed upper resistance while closing slightly higher.
The index briefly fell below 1,500 intraday but was able to hold this level into the closing bell. Sector strength was led by the Financials and Technology, both rising 0.6% and 0.4%, respectively. Real Estate and Health Care were the leading laggards after falling 0.5%.
Global Economy – European markets were mixed as tensions between Iraq and Kurdish forces heightened and may disrupt crude oil flows after Iraqi soldiers seized facilities from Kurdish forces.
France’s CAC 40 advanced 0.2% and Germany’s DAX 30 gained 0.1%. The Belgium20 fell 0.02% and UK’s FTSE 100 slipped 0.1%. The Stoxx Europe 600 fell less than a point, or 0.0%.
Asian markets settled mostly higher with with Japan’s Nikkei Stock Index rallying 100 points, or 0.5%, to a 2-year high on signs the BOJ will keep its overly easy monetary policies in place. Hong Kong’s Hang Seng Index surged 0.8% and Australia’s S&P/ASX 200 advanced 0.6%. South Korea’s Kospi advanced 0.3% while China’s Shanghai index declined 0.4%.
Bank of Japan Governor Kuroda said that achieving the 2% price stability target is still a long way off and the BOJ will persistently pursue aggressive monetary easing.
China September CPI rose 1.6% year-over-year, matching expectations. September PPI rose 6.9% year-over-year, stronger than expectations for a rise of 6.4%.
China September new yuan loans rose by 1.27 trillion yuan, stronger than expectations of 1.20 trillion yuan. September aggregate financing rose 1.820 trillion yuan, stronger than expectations of 1.572 trillion yuan and the biggest increase in 6-months.
The U.S. Empire State manufacturing index hit an 8-year high of 30.2, topping the forecast for a decline to 21 in October.
Market Sentiment- Fed Chair Janet Yellen commented over the weekend that her best guess is that consumer prices will soon accelerate after a period of surprising softness and that these soft readings will not persist. She went on to say that the ongoing strength of the economy will warrant gradual increases in the Fed funds rate.
The iShares 20+ Year Treasury Bond ETF (TLT) opened in the red while testing a low of $125.38 shortly afterwards. Support at $125-$124.50 held for the 4th-straight session with a close below the latter being a bearish development. Lower resistance at $126-$126.50 and the 50-day moving average held on the intraday rebound to $125.90.
Market Analysis- The Russell 2000 ETF (IWM) continues to trade in a tight range between $149-$150.75. The highest close over the past 10 sessions has been $150.33 with the $150 level holding in four of them. The all-time and intraday high is at $150.68.
A close above upper resistance at $150.50-$150.75 would be a bullish development for a possible push towards $152-$152.50 over the near-term. The lowest IWM has traded over the same period was today’s test to $149.03. The beginning of the month breakout from the $147.75-$148 area would likely be in play on a close below shaky support at $149.25-$149.
RSI peaked near the 90 level earlier this month and is trying to hold the 70 level. A move below this level would be a bearish development.
The iShares Nasdaq Biotechnology ETF (IBB) cleared longer-term and two-year resistance at $340 earlier this month but has been in a recent downtrend. The weakness towards $336-$335 and prior support levels over the past few sessions could be considered as a normal backtest, as long as it holds.
A move below $334.50 would be a cause for concern with additional risk to $332.50-$330. Today’s high reached $341.69 with continued closes above $340 being a bullish development.
All the best,
Roger Scott
Head Trader
Market Geeks.