Bears Keep Momentum

U.S. markets were weak throughout Tuesday’s action as Fed Speak and disappointing economic news weighed on sentiment. Chatter over interest rates, where the housing market is headed, and what the near-term outcome will be from this weekend’s G20 summit were too much to avoid a 3rd-straight overall pullback.

One bright spot was the small-caps showing some intraday strength and taking the least damage after leading the way to lower lows the previous few sessions. However, volatility took another leg higher after closing above key resistance levels and could stay elevated until there is a clearer picture.

The Nasdaq tumbled 1.5% after trading to an intraday low of 7,879. Major support at 7,900 failed to hold, and represents the prior breakout level from earlier this month, with a close below 7,850 and the 50-day moving average signaling additional weakness.

The S&P 500 was down 1% following the afternoon pullback to 2,916. Prior and upper support at 2,925 was breached and failed to hold with risk towards 2,900-2,875 and the 50-day moving average on continued weakness.

The Dow dropped 0.7% after testing a 2nd half low of 26,527. Near-term and upper resistance at 26,500-26,250 held with a move below the latter likely leading to a further back-test towards 26,000 and the 50-day moving average.

The Russell 2000 traded in a 13-point range before giving back 0.6%
while testing a midday high of 1,533. Prior and lower resistance from mid-month at 1,535-1,550 and the 200/50-day moving averages held with a close below 1,520 and the late session low being a continuing bearish signal.

Materials were the only sector that closed higher after edging up 0.04%.

Communication Services and Technology were the weakest sectors after stumbling 1.8% while Real Estate and Consumer Discretionary were lower by 1.3% and 1%, respectively.

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GrubHub (GRUB) upgraded to Buy from Neutral at Citi
Lincoln National (LNC) upgraded to Buy from Neutral at Goldman Sachs
SiteOne Landscape (SITE) upgraded to Outperform from Neutral at Baird

GasLog Partners (GLOP) downgraded to Hold from Buy at Stifel
Kellogg (K) downgraded to Underweight from Equal Weight at Consumer Edge
Tiffany (TIF) downgraded to Hold from Buy at Loop Capital

Before the open: Actuant (ATU), BlackBerry (BB), General Mills (GIS), IHS Markit (INFO), Paychex (PAYX), Schnitzer Steel Industries (SCHN), UniFirst (UNF)

After the close: Fuwei Films (FFHL), HB Fuller (FUL), Herman Miller (MLHR), KB Home (KBH), NovaGold Resources (NG), Pier 1 Imports (PIR), Rite Aid (RAD), Worthington Industries (WOR)

Wednesday's economic reports (EST): 
MBA Mortgage Applications - 7:00am
Durable Goods Orders - 8:30am
International Trade in Goods - 8:30am
Retail Inventories - 8:30am
Wholesale Inventories - 8:30am
State Street Investor Confidence - 10:00am

Gold closed at $1,418.70 an ounce, up $0.50
Silver settled at $15.30 an ounce, down $0.08
Copper finished at $2.73 a pound, up $0.03
Crude Oil was at $57.88 a barrel, up $0.04
Bitcoin Investment Trust (GBTC) ended at $14.88, up $0.24

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

   Todd Mitchell

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