U.S. markets rebounded on Thursday with all of the major indexes posting solid gains while mostly recovering prior support levels.

The rally occurred on the busiest day of 3Q earnings season with a number of high-profile companies reporting after the close.

The Dow and S&P are now back in positive territory for the year along with Tech adding to its gains.

The small-caps are still down just over 2% while volatility remains slightly elevated.

The Nasdaq zoomed 3% following the push to 7,364.

Fresh resistance at 7,350-7,400 held with a close above the latter being a continuing bullish signal.

The Russell 2000 rallied 2.2% after tapping a high of 1,506.

The close back above prior support at 1,500 was slightly bullish with resistance now at 1,520-1,525.

The S&P 500 soared 1.9% while testing a second-half high of 2,722.

The close above the 2,700 level was slightly bullish with resistance now at 2,725-2,750.

The Dow surged 1.6% after trading to a session high of 25,104.

The close just below the 25,000 level was slightly bearish but keeps fresh resistance at 25,250-25,500 in play.

Technology and Communication Services led sector strength after jumping 3.4% and 3.3%, respectively.

Consumer Discretionary was higher by 3%.

Utilities were the only sector laggard after giving back 1.6%.

Global Economy - European markets closed mostly higher after the ECB kept the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged.

The Governing Council also said it expects the key ECB interest rates to remain at their present levels at least through the summer of 2019.

France's CAC 40 soared 1.6% and Germany's DAX 30 jumped 1%. UK's FTSE 100 rose 0.6% and the Stoxx 600 Europe added 0.5%. The Belgium20 was down 0.8%.

The German October IFO business climate fell 0.9 to 102.8, weaker than forecasts of 103.2.

Asian markets finished mostly lower with China's Shanghai bucking the trend after climbing a half-point, or 0.02%.

Japan's Nikkei plummeted 3.7% and Australia's S&P/ASX 200 sank 2.8%.

South Korea's Kospi dropped 1.6% and Hong Kong's Hang Seng tumbled 1%.

Japan September PPI services rose 1.2%, matching expectations.

Initial Jobless Claims bounced 5,000 to 215,000, slightly above estimates of 212,000.

The 4-week moving average was unchanged at 211,750 while continuing claims declined 5,000 to 1,636,000.

Durable Goods Orders rose 0.8% in September, easily topping estimates for a 3% pullback. Transportation orders climbed 1.9%. Excluding transportation, orders edged up 0.1%.

Non-defense capital goods orders excluding aircraft dipped 0.1% while shipments climbed 1.3%. Non-defense capital goods shipments excluding aircraft were flat again.

The inventory-shipment ratio fell to 1.60 from 1.61.

International Trade in Goods deficit for September widened to -$76 billion, a new record.

Exports rose 1.8% to $140.9 billion while imports were up 1.5% to $217.0 billion.

Advance September wholesale inventories increased 0.3% to $644.1 billion while advance retail inventories edged up 0.1% to $642.1 billion.

September Pending Home Sales Index were up 0.5%, easily toping estimates for a flat month. Regionally, pending sales were 4% higher in the West and were up 1.2% in the Midwest.

The South declined 1.7% and the Northeast slipped 0.4%. Compared to last September sales are down 3.4% year-over-year, and represented the 9th-straight month of annual declines.

Kansas City Fed Manufacturing Index for October checked in at 8.

Market Sentiment - Federal Reserve Vice Chairman Richard Clarida said further gradual tightening will likely be appropriate in his first public comments since becoming elected.

He added policy remained accommodative and risks to monetary policy are more balanced and less skewed to the downside.

He said the Fed may have to go beyond neutral if strong growth and robust employment were to continue into 2019 and be accompanied by a material rise in actual and expected inflation.

However, he also suggested that if inflation didn't materially pick up, he wouldn't see the funds rate going above neutral.

Clarida went on to say changes in asset markets and other financial conditions, on a sustained basis, need to be taken into account in monetary policy.

However, he is uncomfortable with the Fed getting too deeply into influencing asset prices and feels the later rounds of QE were less effective with higher potential costs.

That said, he wouldn't rule out quantitative easing from the Fed toolkit. Clarida views forward guidance as an effective tool, but it depends on how far a central bank is from its goals.

The iShares 20+ Year Treasury Bond ETF (TLT) traded in negative territory throughout the session while tapping a low of $114.23.

Upper support at $114-$113.50 held with a close below the latter signaling additional weakness.

Resistance remains at $114.50-$115.

Market Analysis - The Russell 2000 ETF (IWM) snapped a 6-session losing streak after making a run to $149.82.

Fresh resistance is at $150-$150.50 held with continued closes above $152 being a more bullish development.

Shaky support is at $147.50-$147. A move below $145.50 would signal additional weakness with risk towards $142.50-$142 and February lows.

RSI is back in a slight uptrend with resistance at 30-35.

A move above the latter would signal additional strength and be a bullish development. Support is at 25-20.

The Utilities Select Spider (XLU) fell for the 3rd time in 4 sessions following the backtest to $54.10. Support at $54-$53.75 held with a close below the latter signaling additional weakness.

Near-term resistance is at $54.75-$55. The prior session high tapped $55.49.

Continued closes above $55.50 would signal a return of momentum with upside potential towards $57-$57.25 and fresh all-time highs.

RSI is in a slight downtrend with support at 55.

A close below this level would signal additional weakness with risk to 50-45. Resistance is at 60.

All the best,
Roger Scott.