Mid-Week Commentary for 12/19/2018

WEEKLY MARKET ANALYSIS

Stocks opened modestly higher but the advance reversed and accelerated during the day into the close. The Dow Jones Industrial Average ETF DIA was down 1 points on the day and closed at 237. For the S&P 500, there is support near 2507 and 2461. Resistance levels are currently at 2597 and 2643.

GLOBAL ASSETS UPDATE

TWELVE SECTOR ANALYSIS

VOLATILITY UPDATE

On Wall Street, 11 of the 12 major market sectors are seeing red today. The biggest losers are Energy (XLE), Healthcare (XLV), and Pharmaceuticals (XPH). The strongest sector today has been Homebuilding (XHB) which has gone up 0.7%.

The CBOE Volatility Index (VIX) is up $0.90 going from $24.68 to $25.58 today. Call volumes are below average today but Put volumes are higher than average. The ratio of puts to calls for the current at-the-money strike of $25 is above average which means that traders are favoring Puts over Calls currently.

MARKET HEAT

A NASDAQ stock with unusually high volume today is Rent-A-Center Inc (RCII). On the AMEX VirnetX Holding Corporation (VHC) has had significant interest, and on the NYSE Denbury Resources Inc. (DNR) has had unusual volume.

The biggest mover out of other high-volume stocks is Rent-A-Center Inc (RCII) which has moved down over -10% recently on volume of over 35 million shares. The chart below shows the performance of RCII over the last year. Rent-A-Center, Inc. is a rent-to-own operator in North America.

DARWIN RENT-A-CENTER INC FORECAST

The performance of Rent-A-Center Inc (RCII) will be worth watching in the near term for a number of reasons. The forecast for the coming week on RCII is for the price to go up. The correlation of RCII to the S&P 500 recently has been 0.6 which is a moderate positive correlation. Key levels to watch for RCII are upside resistance at the $14 and downside support at the $12 price points.