Yesterday’s close: Settled at 2989, up 12.00
Fundamentals: U.S benchmarks firmed-up yesterday from Friday’s late selloff and are extending gains this morning after President Trump announced a bipartisan deal to lift the debt ceiling and boost spending. With Congress set for summer break after this week and not returning until the week after Labor Day, finding common ground to avoid another shutdown was crucial. Both parties agreed that liquidity dried up late last year at the onset of the government shutdown and avoiding such was a top priority. The deal is expected to make its way through a Congressional vote before being signed by the President.
We expect earnings ahead of the bell to set a tone today. To name a few, Coca-Cola, United Technologies, Lockheed Martin and Biogen are all up strongly after beating estimates and raising forecasts. Visa, Chipotle, Texas Instruments and others report after the close.
On the economic calendar, the House Price Index is due at 8:00 am CT. Existing Home Sales and Richmond Fed Manufacturing are released at 9:00 am CT. There is a 2-year Note auction at noon CT. The odds of a 50-basis point rate cut by the Fed next week have decreased to 21%.
Technicals: Stocks are in an uptrend; this is undeniable, and this is why we have kept a minor Bullish Bias though reaching what we noted as exhaustion levels and upon pullbacks. As we noted here, we would be buyers as low as 2944.25. However, we also noted the tape can be traded from both sides if looking through a tighter time frame. Yesterday’s settlement pinned the price action right at a crucial level of resistance for the both the S&P and NQ, one we noted as a close above to be Bullish. Given the firm tape from settlement and such a constructive pullback, we have increased our Bias to be more Bullish today and this remains so above 2987.50-2990.50 and 7917.25-7933. In fact, we would love to buy pullbacks intraday to this level, although a close below here will neutralize such. To the upside, the NQ is eyeing a fresh record high and faces our major three-star resistance at 7993-8001.50; a close above here should encourage a wave of 1% higher.
Resistance: 3004.75**, 3012.50-3015.50***, 3023.75**, 3045-3057.75***
Support: 2987.50-2990.50**, 2977-2978.50**, 2963-2969.25***, 2944.25***
Resistance: 7993-8001.50***, 8012.75**, 8076.50***
Support: 7917.25-7933***, 7878.50-7887.25**, 7815.25-7842.75***, 7743-7759.25**, 7693.75***