U.S. markets finished mixed on Tuesday with the Dow closing in the green for the 6th-straight session after setting another record high on the open.

The losses were somewhat contained on the S&P 500 and Nasdaq sliding a half-point and 0.3%, respectively. However, the Russell 2000 tumbled 1.3% to test late September support on the double-top breakout above the 1,450 level.

The low reached 1,476 with a move below 1,470 and the 50-day moving average being a bearish development for a possible backtest towards 1,450 to fill the gap.

Sector laggards included the Financials and Consumer Discretionary after falling 1.4% and 0.6%, respectively. The Utilities and Consumer Staples sectors showed strength after gaining 1.2% and 1.1% while Real Estate rose 0.9%.

Global Economy- European markets traded in the red with Brexit negotiations slated to restart this week. Germany’s DAX 30 and UK’s FTSE 100 tumbled 0.7% while France’s CAC 40, the Stoxx Europe 600 and the Belgium20 stumbled 0.5%.

German September industrial production fell 1.6% month-over-month, weaker than expectations for a decline of 0.9%, and the biggest drop in 9 months.

Eurozone September retail sales rose 0.7% month-over-month, stronger than expectations for a rise of 0.6%, and the largest increase in 11 months.

Asian markets closed mostly higher with Japan’s Nikkei surging 1.7% to a 25-year high. Hong Kong’s Hang Seng Index zoomed 1.4% to a 10-year peak and Australia’s S&P/ASX 200 jumped 1% to its highest level since 2008. China’s Shanghai index rallied 0.8% while South Korea’s Kospi slipped 0.2%.

Japan September labor cash earnings rose 0.9% year-over-year, stronger than expectations for a gain of 0.5% and the biggest increase in 14 months. September real cash earnings fell 0.1% year-over-year, stronger than expectations for a decline of 0.2%.

NFIB Small Business Optimism Index level checked in at 105.3 versus consensus of 105.

U.S. chain store sales rebounded 0.3% in the week ending November 4th, after the prior week’s 1.1% decline.

The October Gallup US ECI level came in at 3.

Redbook Store Sales were up 2.6% for the year for the week ending November 4th.

September JOLTS Jobs Openings at 6,093,000 versus expectations of 6,082,000.

U.S. consumer credit reached $20.8 billion in September, stronger than forecasts of $17.4 billion.

Market Sentiment- The iShares 20+ Year Treasury Bond ETF (TLT) traded higher for the 8th-straight session with today’s top tapping $126.78. Upper resistance $126.25-$126.50 held into the close and gets additional hurdles at $127-$127.25 in play. Rising support is $126-$125.75.

RSI is approaching early September resistance near 68 with a close above this level indicating further strength.


Market Analysis-mThe Spiders Dow Jones Industrial Average ETF (DIA) recently broke out above a trading range between $232.50-$235 following its third-straight close above the latter. Today’s all-time high tapped $235.88 with fresh resistance at $237-$237.50 now in play.

A close back below $234.75-$234.50 could lead to additional weakness towards $232.50-$232.25 and the bottom of the trading range that has been holding since mid-October.

RSI remains in slightly overbought territory and is leveling out. Continued closes above resistance at 80 would be a bullish development for another possible run towards 90. A move below support at 75-70 would likely signal upcoming weakness.


The iShares PHLX Semiconductor ETF (SOXX) tested an all-time high of $178.75 with fresh resistance at $179.50-$180 now in play. Current support is at $177-$176.50 with a move below $176 likely leading to a further backtest towards $172.50-$172.

RSI recently cleared mid-June and mid-October resistance at 80 and is signaling overbought levels.


All the best,
Roger Scott