10-10-2018 Trade of the Day

Bears Stay Aggressive

U.S. markets showed continued weakness on Wednesday and gained downside momentum into the closing bell, leading to the market's worst trading day since June. Trade concerns and rising interest rates have been a headwind for the market over the past two weeks and finally reached a boiling point.

Fueling the selloff late was news that the U.S. Justice Department charged a Chinese intelligence officer of economic espionage for theft of trade secrets from leading U.S. aerospace companies. The news is hardly likely to tamp down rising Sino-U.S. trade/tariff animosity as volatility soared past a key level of resistance.

The Nasdaq plummeted 4.1% after tapping a low of 7,420. Fresh and upper June support at 7,400-7,350 held on the close below the 200-day moving average with a move below the latter being a continued bearish development.

The S&P 500 slumped 3.3% following the pullback to 2,784. Upper support at 2,775-2,750 and the 200-day moving average held with a close below the latter being a warning sign for lower lows.

The Russell 2000 sank 2.9% while closing on its session low of 1,575. May support at 1,570-1,560 held with a drop below the latter likely leading to 1,540.

The Dow tumbled 3.2% after testing an intraday low of 25,593. Fresh and upper support at 25,600-25,400 was stretched by a couple of points into the close with a move below the latter being a continued bearish signal.

There was no sector strength. Technology and Communications Services were slammed for losses of 4.9% and 4%, respectively. Utilities fell 0.6% and were the least affected.


Discovery (DISCA) upgraded to Outperform from Neutral at Credit Suisse
McDonald's (MCD) upgraded to Buy from Neutral at Guggenheim
Intuitive Surgical (ISRG) upgraded to Overweight from Neutral at Piper Jaffray
International Paper (IP) downgraded to Neutral from Buy at Goldman Sachs
Sherwin-Williams (SHW) downgraded to Neutral from Buy at Citi
Vipshop (VIPS) downgraded to Neutral from Overweight at JPMorgan


Thursday's earnings announcements (EST): 

Before the open: Commerce Bancshares (CBSH), Delta Air Lines (DAL), Emmis Communications (EMMS), Endava (DAVA), Walgreens Boot Alliance (WBA)
After the close: ​Exfo (EXFO)

Thursday's Economic Reports (EST):
Claims - 8:30am
Consumer Price Index - 8:30am


Gold closed at $1,193.40 an ounce, up $1.90

Silver settled at $14.33 an ounce, down $0.07

Copper finished at $2.78 a pound, down $0.03

Crude Oil is at $72.59 a barrel, down $2.37

Bitcoin Investment Trust (GBTC) ended at $7.31 down $0.41

   I hope this helps you prepare for tomorrow. Have a great evening.

   Todd Mitchell


Bears Stay Aggressive

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