EB Daily Market Report - Wednesday, October 9, 2024

Webinar Special Ends Tonight

Just a quick reminder that our Webinar Special from Saturday will expire at midnight tonight. If you're a trial member or monthly member, you can save a lot of money by signing up for an annual membership PLUS receive a 13th month FREE. Also, current annual members who have expiration dates upcoming can use this special as well. CLICK HERE for more details, but don't delay, because the special will end tonight at midnight!

Trading Places LIVE

My apologies to everyone for not having our regular Tuesday TPL. I had an appointment Tuesday morning that I couldn't miss, so I wanted to try to replace it with a Wednesday TPL this morning. A follow-up appointment was scheduled last minute and I didn't provide our EB team enough time to let everyone know. This one was on me. I will be recording my Thursday StockCharts show later today and I promise to have some interesting trading candidates for you.

Trading Places LIVE will be back to its normal time next Tuesday, October 15th at 9:00am ET. Again, my apologies for this morning.

Executive Market Summary

• Futures were relatively flat at today's opening bell
• Buyers have been in control most of the day, though this afternoon has been much better for growth stocks
• The S&P 500 is currently in a position to close at another all-time high, barring selling in the final 30 minutes
• The 10-year treasury yield ($TNX) is up again, this time 4 basis points to 4.07%; it's approaching key yield resistance - see Market Outlook below
• Most commodities are lower, including copper ($COPPER, -1.00%); materials (XLB, +0.72%) is 1 of the 8 sectors in positive territory, however
• Technology (XLK, +1.04%) is the best-performing sector, led by computer services ($DJUSDV, +2.06%); IBM (+2.64%) continues its upside acceleration
• Reinsurance ($DJUSIU, +3.13%) is up nicely, benefiting financials (XLF, +0.87%), the 2nd-best performer
• Defensive sectors are mostly struggling, especially utilities (XLU, -0.82%)
• Cruise lines are performing very well today as NCLH (+10.58%), CCL (+7.92%), and RCL (+5.08%) are the top 3 performers in the S&P 500

Market Outlook

Well, we're going to get the latest CPI report tomorrow morning. Right now, we're expecting the September Core CPI to rise 0.2%. Anything above that level could spook the stock market, while recent history suggests that a below-expectation number could light another fire under stocks given the Fed's recent dovish shift.

The 10-year treasury yield ($TNX) has been on the move higher, but that could all change with a tame CPI report. The TNX has been trending higher, but I see key yield resistance approaching:

It's worth noting that the IWM (ETF that tracks the small cap Russell 2000) turns from short-term bearish to short-term bullish at today's close - from a historical perspective.

Sector/Industry Focus

Internet stocks ($DJUSNS, -1.00%) are struggling today on a relative basis, but the group has clearly marked its short-term support and resistance. Check this out:

The uptrend has been followed by a bit of selling that took the DJUSNS back down to its 20-day EMA, where buyers reappeared. For now, the trading range is 4434-4625.

ChartLists/Strategies

I ran our Downtrend Reversal scan of the Strong Earnings (SECL) and Raised Guidance ChartLists (RGCL). 31 stocks were returned. The 3 stocks with SCTRs above 80 were THC, INTA, and ATGE. Of these 3, the one I like is THC as it just reversed off key price support and printed a hammer:

First, THC is a leading stock within the health care providers group. Next its RSI is at 41. In my experience, buying uptrending stocks after a pullback that takes the RSI into the 40-50 range is generally a successful trading strategy. Throw in the test of both price and trendline support, along with the reversing hammer candlestick and there's a lot to like here.

Earnings Reports

Here are the key earnings reports for the next two days. I include all companies with market caps of $10 billion or more and also include notable companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies that you own or are considering owning.

Wednesday, October 9:

AZZ, APLD, HELE

Thursday, October 10:

DAL, DPZ, NEOG, TLRY

Economic Reports

August wholesale inventories: +0.1% (actual) vs. +0.2% (estimate)

FOMC minutes released at 2:00pm ET

Happy trading!

Tom