U.S. markets rallied to fresh all-time highs and prior resistance levels on news China was prepared to take more steps to open up their country to outside investment.

This would significantly cut import tariffs and provided a catalyst for the major indexes to rally.

There were several economic data points hitting new records that also gave the market another tailwind.

Volatility continued to trickle lower with major support holding ahead of quadruple witching on Friday.

The Dow zoomed 1% after trading to a record high for the first time since late January while tapping 26,697.

Fresh resistance is at 26,800-27,000 on continued closes above the 26,600 level.

The Nasdaq also jumped 1% following its intraday run to 8,039.

Lower resistance at 8,000-8,050 was cleared and held with a move above the latter getting getting 8,100-8,150 in play.

The S&P 500 soared 0.8% while reaching a record high of 2,934 and clearing its previous late August peak.

Lower and fresh resistance at 2,925-2,950 held into the closing bell.

The Russell 2000 was up 1% after closing on its session high of 1,720.

Lower and prior resistance at 1,720-1,725 held with a move above the latter getting 1,740-1,745 and lifetime highs back in the mix.

Consumer Staples rallied 1.3% and Technology rose 1.2%. Materials and Communications Services were up 1.1%.

There were no sector laggards.

Global Economy – European markets showed strength for the 4th-straight session after the Bank of England raised its bank rate by 25 basis points, to 0.75%.

The nine-member Monetary Policy Committee voted unanimously for the hike.

France’s CAC 40 surged 1.1% and the Belgium20 bounced 1%. Germany’s DAX 30 was higher by 0.9% and the Stoxx 600 Europe rose 0.7%. UK’s FTSE 100 gained 0.5%.

The Organization for Economic Cooperation and Development cut its global 2018 GDP forecast to 3.7% from a May estimate of 3.8% and said the global economy is shrouded in high uncertainty as the outlook for emerging markets deteriorates and trade tensions intensify.

UK Aug retail sales ex-auto fuel rose 0.3% month-over-month and 3.5% year-over-year, stronger than expectations for a decline of 0.2% and a rise of 2.4%, respectively.

August retail sales including auto fuel were up 0.3% and 3.3%, topping forecasts for a dip of 0.2% month-over-month and a gain of 2.3% year-over-year.

In Brexit negotiations, the MPC said it continues to recognize that the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of the EU withdrawing.

Asian markets were mixed despite China announcing possible plans to cut the average tariff on imports from the majority of its trading partners as soon as next month.

South Korea’s Kospi advanced 0.7% and Hong Kong’s Hang Seng added 0.3%.

Japan’s Nikkei was up 2 points, or 0.01%. Australia’s S&P/ASX 200 fell 0.3% and China’s Shanghai slipped 0.1%.

Jobless Claims fell by 3,000 to 201,000 last week, dropping to their lowest level since November 1969, and beating estimates for a rise of 8,000 to 212,000.

The 4-week moving average fell to to 205,750 versus 208,000 previously. Continuing claims dropped 55,000 to 1,645,000 in the week ending September 8th.

Philadelphia Fed Business Outlook Survey for September checked in at 22.9 for September, up from 11.9 in the previous month, and topping forecasts of 19.

Existing Home Sales were flat at an annual rate of 5.34 million in August, breaking a string of four consecutive monthly declines, but missing estimates of 5.36 million.

Single family sales were unchanged as well at 4.75 million while condo/coop sales were steady at 590,000 after the 4.8% drop in July.

Sales rose 7.6% in the Northeast and were up 2.4% in the Midwest, while the West posted a 5.9% decline and the South slipping 0.4%. The number of months supply of homes held at 4.3 for a third-straight month.

The median sales price slipped to $264,800 versus the prior $269,300, but is up 4.6% year-over-year.

The Leading Indicators index rose 0.4% to 111.2 in August, another new record high. Seven of the 10 components contributed positively, led by ISM new orders (0.20%), the leading credit spread (0.13%), and the interest rate spread (0.11%).

Three factors subtracted, including building permits (-0.17%), the average workweek (-0.07%), and non-defense capital goods orders (-0.02%).

Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) rebounded from its recent downtrend to test a high of $117.30. Lowered resistance at $117.25-$117.75 held.

A close back above $118 would signal a possible short-term bottom is in. Support is at $116.50-$116.

Market Analysis – The PowerShares QQQ (QQQ) made a run to $184.97 with near-term resistance at $185-$185.50 holding.

A move above the latter would be a bullish development for another run at towards $187-$187.50 and fresh all-time highs.

Support at $182.50-$182 with a move below the latter likely leading to a retest to $181.50-$181 and the 50-day moving average.

A close below the $180 level would be a slightly bearish signal and signal another short-term top.

RSI is pushing resistance at 60 with a move above this level signaling additional strength for a run at 65-70 and August highs. Support is at 55-50.

The Dow Jones Transportation Average ($TRAN) has been in a tight trading range between 11,400-11,600 after breaking out above the 11,500 level while setting a recent record high just north of 11,600.

Thursday’s high reached 11,596 with continued closes above the latter leading to a possible run towards 11,700-11,800.

Short-term support is at 11,400. A move below 11,350 would signal a possible near-term top with risk to 11,200-11,100 and the 50-day moving average.

RSI is pushing lower resistance at 65-70 with continued closes above the latter signaling additional momentum.

Support is at 60 with a move below this level being a slightly cautious signal with risk to 55-50.

All the best,
Roger Scott