Markets Focused Powell's Comments To Senate

Thursday,March 1, 2017, 12:00 PM, EST

• NASDAQ Composite +0.01% Dow -0.18% S&P 500 +0.10% Russell 2000 +0.43% S&P MID 400 +0.56%
• NASDAQ Advancers: 1368 Decliners: 850
• Today's Nasdaq Volume (100 day avg.) +12%

The markets are focused on Fed Chairman Powell's comments to the Senate, declining commodities and if the pattern of late session pullbacks will continue. Over the last two days, the Dow has lost 700 points, with most of the downside coming after 2pm each day. Midway through the session today, stocks indexes are bobbing back and forth between gains and losses.

• Weekly Jobless Claims dropped to 210k, which is lowest level since 1969, while a healthy ISM Manufacturing and Personal Spending/Income read are likely the most telling pieces from today's slate of economic data. Feb ISM climbed to 60.8 (highest level since 2004), as the data suggests that demand is expanding at pace that factories can't keep up with. Personal Income/Spending saw an uptick in January, but according to economists the real boost from tax reform might not be seen for several months.
• The Senate is getting their opportunity to question newly appointed Fed Jerome Powell today. Through about midday, the tone and comments haven't deviated much from his previous statements, as senators look for clarity on the Fed's inflation outlook, when wage growth should start to accelerate and if the full-employment environment is sustainable.
• Mylan (+6%) and NRG Energy (+4%) are the top gainers on the S&P 500 after strong quarterly results.
• The SEChas issued numerous subpoenas and information requests in a broad reaching investigation of technology companies and their advisers involved with digital currencies. The WSJ noted that the SEC has suggested that token sales and ICOs could be illegal. Coin offerings raised $6.5 billion last year and more than $1.6B so far in 2018.

Technical Take: Gold Miners Mining Through Major Support

Yesterday we highlighted the potential double bottom reversal pattern (aka "W" pattern) in the UD dollar Index (DXY) and today that has triggered on its move above the 90.56 - 90.62 resistance zone. This range represents the midpoint of the "W" pattern, as well as the 50-day sma. If the dollar follows through and reaches its projection of 92.56, this should act as a headwind for inflation plays like oil and gold. Note the technical setup of the VanEck gold miners ETF (ticker GDX). The below weekly chart shows the GDX in a clearly defined trading range between roughly $21 and $25 for t13 consecutive months. Today it is beginning to penetrate this critical support level just as the inversely correlated DXY is making a bullish breakout. A breakdown below the $21 support carries a measured move towards the $17 price level, down ~19% from last sale. This projection resides nearly exactly to the midpoint of the double bottom low that was formed back in late 2015 which then marked a major cyclical low where the GDX declined 81% in just over four years.

Nasdaq's Market Intelligence Desk (MID) Team includes:

Michael Sokoll, CFA is a Senior Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over 25 years of equity market experience. In this role, he manages a team of professionals responsible for providing NASDAQ-listed companies with real-time trading analysis and objective market information.

Jeffrey LaRocque is a Director on the Market Intelligence Desk (MID) at Nasdaq, covering U.S. equities with over 10 years of experience having learned market structure while working on institutional trading desks and as a stock surveillance analyst. Jeff's diverse professional knowledge includes IPOs, Technical Analysis and Options Trading.

Steven Brown is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over twenty years of experience in equities. With a focus on client retention he currently covers the Financial, Energy and Media sectors.

Christopher Dearborn is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq. Chris has over two decades of equity market experience including floor and screen based trading, corporate access, IPOs and asset allocation. Chris is responsible for providing timely, accurate and objective market and trading-related information to Nasdaq-listed companies.

Annie O'Callaghan is Director on the Market Intelligence Desk (MID) at Nasdaq. Annie has worked for NASDAQ in a variety of roles including support of Nasdaq C-level management in client retention and customer service. Annie also served as a Sales Director in Nasdaq's Transactions Services business. Prior to joining Nasdaq, Annie worked at AX Trading, managing accounts for its Alternative Trading System and served on Credit Suisse's trading desk as an Electronic & Algorithmic Sales Trading Analyst.

Brian Joyce, CMT is a Director on the Market Intelligence Desk (MID) at Nasdaq. Before joining Nasdaq Brian spent 16 years as an institutional trader executing equity and options orders for both the buy side and sell side. He also provided trading ideas and wrote technical analysis commentary for an institutional research offering. Brian focuses on helping Nasdaq's Financial, Healthcare and Transportation companies, among others, understand the trading in their stock. Brian is a Chartered Market Technician (CMT).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.