Bears Return as VIX Holds 20

U.S. markets started the shortened holiday week with losses after the latest round of tariffs on Chinese goods went into effect over the weekend. U.S. and Chinese officials offered little details on their tentative face-to-face trade talks due to be held this month after the U.S. spurned a request to delay tariffs.

Economic news also weighed on trading along with an inverted yield curve. The major indexes held near-term support levels while volatility cleared 20 but a level that held into the closing bell.

The Russell 2000 tanked 1.5% after kissing a 2nd half low of 1,467. Prior and upper support at 1,475-1,460 failed to hold with risk towards 1,440-1,425 on a close below the latter.

The Nasdaq gave back 1.1% following the late day pullback to 7,847. Current and upper support at 7,850-7,800 was breached but held with risk towards 7,750-7,700 and August lows on a close below the latter.

The Dow also dropped 1.1% after trading to an intraday low of 25,978. Upper support at 26,000-25,800 was breached but held with a close below the latter getting 25,600 and the 200-day moving back in play.

The S&P 500 fell 0.7% after tapping an intraday low of 2,891. Near-term and upper support at 2,900-2,875 was breached but held into the close with a move below the latter getting 2,825-2,800 back in focus.

Utilities and Real Estate rallied 1.7% and 1.4% to lead sector strength while Consumer Staples edged up 0.6%. Industrials were the leading sector laggard after tumbling 1.4% while Technology and Financials sank 1.2% and 1%.

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Brinker (EAT) upgraded to Buy from Hold at Gordon Haskett
Under Armour (UA) upgraded to Market Perform from Underperform at Bernstein
Westpac Banking (WBK) upgraded to Outperform from Neutral at Credit Suisse

AstraZeneca (AZN) downgraded to Sell from Hold at DZ Bank
Boston Beer (SAM) downgraded to Underperform from Hold at Jefferies
Spirit Airlines (SAVE) downgraded to Outperform from Strong Buy at Raymond James

Before the open: American Eagle Outfitters (AEO), Ferroglobe (GSM), Jiayin Group (JFIN), Michaels Companies (MIK), Navistar International (NAV), era Bradley (VRA)
After the close:  AeroVironment (AVAV), At Home Group (HOME), Cloudera (CLDR), Descartes Systems (DSGX), Dynatrace (DT), Mitcham Industries (MIND), MongoDB (MDB), Palo Alto Networks (PANW), Pivotal (PVTL), Rev Group (REVG), Slack Technologies (WORK), Smartsheet (SMAR), Verint Systems (VRNT)

Wednesday’s economic reports (EST): 
MBA Mortgage Applications - 7:00am
International Trade in Goods - 8:30am
Redbook - 8:55am
Beige Book - 2:00pm

Gold closed at $1,559.90 an ounce, up $26.50
Silver settled at $19.24 an ounce, up $0.90
Copper finished at $2.53 a pound, down $0.02
Crude Oil was at $53.95 a barrel, down $1.21
Bitcoin Investment Trust (GBTC) ended at $12.93, up $1.21

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

   Todd Mitchell

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