Bears Growl, Push Mid-December Support Levels



U.S. markets showed weakness from the open on Thursday, following a couple of major revenue warnings out of the Tech and Airline sectors. The news comes ahead of the “official” start of 4Q earnings season and upcoming comments from Fed Chairman Jerome Powell on Friday.

With mid-December support levels back in play, the market will want to hear the Fed will be pausing its tightening posture and may be done with hikes for awhile. The dots are showing 2 possible rate hike this year but concerns over signs of slowing growth, weakness in interest sensitive sectors, and tightening financial conditions could box the Fed in a corner.

The Nasdaq had its 5-session winning streak snapped after tumbling 3% while tapping an intraday low of 6,457. Prior support at 6,450-6,400 held with a move below the latter signaling additional weakness.

The Dow dropped 2.8% following the pullback to 22,638. Fresh and upper support at 22,600-22,400 held with close below the latter signaling additional risk towards 22,200-22,000 and possible fresh 52-week lows.

The S&P 500 stumbled 2.5% after trading to a second-half low of 2,443. Fresh and upper support at 2,450-2,425 was breached with a move below the latter being a bearish signal for a continued back-test towards 2,400-2,350.

The Russell 2000 was down 1.3% after testing a late session low of 1,325. Major support at 1,325 held for the 4th-straight session with a move below this level opening up risk towards 1,315-1,300.

Real Estate was up 0.5% and was the only sector that showed strength.

Technology plunged 5.1% and led sector weakness. Industrials and Materials sank 3% and 2.8%, respectively.


ANALYST UPGRADES/DOWNGRADES

First Solar (FSLR) upgraded to Buy from Neutral at Goldman Sachs
Stryker (SYK) upgraded to Outperform at Evercore ISI
Waters (WAT) upgraded to Neutral from Underperform at BofA/Merrill

American Electric (AEP) downgraded to Neutral from Buy at Mizuho
Genesee & Wyoming (GWR) downgraded to Equal Weight from Overweight at Stephens
Lumber Liquidators (LL) downgraded to Hold from Buy at Loop Capital




EARNINGS 
Friday Before the Open (EST):
AngioDynamics (ANGO), Cal-Maine Foods (CALM), Lamb Weston Holdings (LW), RPM International (RPM)

​Friday After the Close (EST): None




UPCOMING ECONOMIC NEWS 
Friday's Economic Reports (EST):
International Trade in Goods - 8:30am
Retail Inventories - 8:30am
Wholesale Inventories - 8:30am
Chicago PMI - 9:45am
Pending Home Sales Index - 10:00am
Baker-Hughes Rig Count - 1:00pm


METALS / OIL

Gold closed at $1,294.80 an ounce, up $10.70
Silver settled at $15.80 an ounce, up $0.15

Copper finished at $2.57 a pound, down $0.05

Crude Oil is at $46.87 a barrel, up $0.54

Bitcoin Investment Trust (GBTC) ended at $4.52, 
down $0.10




  I hope this helps you prepare for the trading day. Make it a great one!

   Todd Mitchell

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Bears Growl, Push Mid-December Support Levels

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