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PreMarket Prep Recap: Buybacks Add Fuel To Rally Ahead Of Quadruple Witch Expiration

PreMarket Prep Recap: Buybacks Add Fuel To Rally Ahead Of Quadruple Witch Expiration

At the top of Thursday's PreMarket Prep show, the likelihood of follow-through from the late rally in Wednesday's session was debated.

Two factors increasing the chance of that were the overall reaction from the Fed's action, a buyback from Target Corporation (NYSE: TGT) and a dividend raise and buyback by the S&P 500 index top component Microsoft Corporation (NASDAQ: MSFT).

From the premarket action, it appeared that Microsoft was more likely to make a new all-time high than Target, which turned out to be the case.

Overstock, Steel Sector Guidance And Good News From RH

The impact of the former CEO of Inc (NASDAQ: OSTK) dumping all of his shares was discussed.

The only major support level that could halt the decline would be its Sept. 3 low of $14.72, Dick said.

Off the open, the issue continued lower but found support a few pennies above that low and has rebounded back into the mid-$15 handle.

United States Steel Corporation (NYSE: X) followed the lead of Steel Dynamics, Inc. (NASDAQ: STLD) in lowering third-quarter guidance, and it was deep in the red in premarket trading.

The warnings came at a bad time for investors in the sector, as the issues had distanced themselves from recent lows.

On the opposite end of the guidance spectrum was Restoration Hardware Holdings, Inc (NYSE: RH), which raised its 2019 guidance just one week after upbeat second-quarter results.

Buyers were able to nudge the issue to a new all-time-high, but the stock surrendered all of those gains and has gone red on the session.

Chaikin Bullish, Johnson Bearish

Once again, Roku Inc (NASDAQ: ROKU) made a move during the show. This time it was to the upside, as the company announced a new streaming player line-up.

This helped end the slide instigated by Facebook, Inc. (NASDAQ: FB) and Comcast Corporation (NASDAQ: CMCSA). The two companies announced Wednesday that they were entering the streaming fray. 

Roku's rally from the premarket session carried over into Thurdsay's regular session, but it has come nowhere near Wednesday's high ($145.75). Surely, investors caught in the issue's massive sell-off are lightening up into the rally.

A pair of guests joined the show with differing views of the markets.

Marc Chaikin of Chaikin Analytics exuded optimism for the rally to continue, while Gordon Johnson of GLJ Research pointed out several negatives with respect to the U.S. and Chinese economies and a not-so-favorable outlook for the steel. electric vehicle, solar and cannabis sectors.

Schwartz Joins Friday's Show 

On the final show of the week, Jerremy Schwartz, director of research at Wisdom Tree Investments Inc (NASDAQ: WETF), will comment on Fed's recent action, oil and the return of small-cap value.

PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET here. The replay can be found on Benzinga's YouTube channel, and the podcast is on iTunesGoogle PlaySoundcloudStitcher and Tunein.

Related Links: 

PreMarket Prep Recap: A Trio Of Earnings Debacles, Facebook Pulls A Fast One On Roku

PreMarket Prep Roundup: All Quiet On The Fed Front


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