U.S. markets traded in a tight range on Wednesday while setting record highs before ending the session mixed.

The Dow and S&P 500 failed in their attempts at setting all-time highs after opening higher but spending the majority of the session underwater afterwards.

The losses were contained with the indexes slipping 0.3% and 0.1%, respectively.

The Nasdaq extended its winning streak to 3-straight after rising 0.1% and reaching a record high north of 6,874 intraday.

Meanwhile, the Russell 2000 reached a lifetime intraday high of 1,524 before settling slightly lower with a loss of 0.1%.

Energy showed sector strength after rising 0.4%. Consumer Discretionary and Industrials also showed slight gains with the sectors gaining 0.1%. Financials lagged after falling 0.5% while Real Estate and the Materials sectors slipped 0.3%.

Global Economy- European markets finished mostly lower with the UK’s FTSE 100 bucking the trend after rising 0.1% for its third-straight day of gains.

Germany’s DAX 30 sank 1.2% while France’s CAC 40 and the Stoxx Europe 600 shed 0.3%. The Belgium20 slipped over point, or 0.04%.

ECB Executive Board member Coeure said the economic environment is improving, price pressures are building up and they’ve become less reliant on their monthly net asset purchases.

He said he expects interest rate guidance to gain importance over time, up to a point where it would be possible to delink it from the end of net asset purchases.

Asian markets closed higher across the board with Hong Kong’s Hang Seng Index adding 0.6% while topping 30,000 for the first time in a decade.

China’s Shanghai Composite also rose 0.6% and Japan’s Nikkei advanced 0.5%. Australia’s S&P/ASX 200 and South Korea’s Kospi were higher by 0.4%.

Initial jobless claims fell 13,000 to 239,000 in the week ending November 18th.

Durable goods orders dropped 1.2% in October, well below estimates for a rise of 0.3%. Excluding transportation, orders grew 0.4%, which was slightly below the 0.5% growth forecast.

The University of Michigan’s final November consumer sentiment reading came in at 98.5, down 2.2 points from the October reading of 100.7.

Consumer Sentiment Index checked in at 98.5 versus expectations of 98.1.

The MBA mortgage market index rose 0.1%, along with a 5.3% jump in the purchase index and a 4.8% drop in the refinancing index for the week ending November 17th. The average 30-year fixed mortgage rate rose 2 basis points to 4.20%.

Market Sentiment- The minutes from the Fed’s meeting that concluded on November 1 stated:

“Consistent with their expectation that a gradual removal of monetary policy accommodation would be appropriate, many participants thought that another increase in the target range for the federal funds rate was likely to be warranted in the near term if incoming information left the medium-term outlook broadly unchanged.

Several participants indicated that their decision about whether to increase the target range in the near term would depend importantly on whether the upcoming economic data boosted their confidence that inflation was headed toward the Committee’s objective.

A few other participants thought that additional policy firming should be deferred until incoming information confirmed that inflation was clearly on a path toward the Committee’s symmetric 2 percent objective.

A few participants cautioned that further increases in the target range for the federal funds rate while inflation remained persistently below 2 percent could unduly depress inflation expectations or lead the public to question the Committee’s commitment to its longer-run inflation objective.”

In her remarks last evening, Fed Chair Yellen said that removing policy accommodation too quickly risks leaving inflation below the Fed’s target and there had been some hint that expectations for future price increases may be drifting down.

She went on to say, removing policy accommodation too slowly also has risks and the labor market could tighten very quickly.

The iShares 20+ Year Treasury Bond ETF (TLT) traded up to $127.20 while holding lower resistance at $127-$127.50. Support is at $126.50-$126.25 with a move below $126 signaling additional weakness.

RSI closed above 60 and a level that served as resistance earlier this month.


Market Analysis- The PowerShares QQQ (QQQ) traded to an all-time high of $155.84 with fresh resistance now at $155.75-$156. Continued closes above the latter could lead to a blowoff rally towards $157.50-$158.

Current support is at $155-$154.50 with the latter representing the recent double-top breakout. A move back below $154 gets the prior trading range down to $152 back in play and levels that have held throughout the month.

RSI is trying to clear and hold October resistance at 70 with continued closes above this level signaling additional strength.


The Health Care Select Sector Spider (XLV) recently held early September support at the $80.50 level and an area that represented a triple-top breakout. A trading range has formed throughout this month with a close below $80.50 being a bearish development.

Current resistance is at $81.75-$82 with today’s high tapping $81.92. The 50-day moving average is in a downtrend but could improve with continued closes above $82.25-$82.50.

RSI is trying to clear resistance at 50 and a level that served as prior support in late September and mid-October.


All the best,
Roger Scott