Bears Stay Aggressive

U.S. markets continued their descent to lower lows on further escalation of the U.S. / China tariff war. Specifically, China asked state purchasers to cut imports of U.S. agricultural imports by half while the yuan surged to over a decade low versus the dollar.

The technical damage was severe as the 50/200-day major movings were breached by the major indexes and is signaling a retest towards late May lows. Volatility spiked to its highest levels since the beginning of the year after closing above the 20 level for the first time since mid-May.

The Nasdaq was pulverized with a 3.5% loss after testing an intraday low of 7,662 while closing below the 8,000 level for the 1st time since late June. Prior and upper support from mid-May at 7,650-7,600 held on the close back below the 50-day moving average and above the 7,700 level.

The Russell 2000 was rocked for 3% following the late day tumble to 1,472 and close below its 200-day moving average. Prior and upper support from late May at 1,475-1,460 held with the May 31st and June 3rd lows at 1,461 and 1,460, respectively.

The S&P 500 also sank 3% after stumbling to a 2nd-half low of 2,822 and closing back below the 50-day moving average. Mid-May and upper support at 2,850-2,825 was tripped and failed to hold with a close below the latter getting 2,800 and the 200-day moving average in play.

The Dow tanked 2.9% following the steady drop to 25,523 ahead of the closing bell while also failing to hold its 50-day moving average. Upper support at 25,750-25,500 was breached and failed to hold with a close below the latter and the 200-day moving average signaling additional weakness.

There was no sector strength. Technology was the weakest sector after giving back 4.2% while Financials and Communication Services fell 3.3% and 3.2%. respectively.

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AB InBev (BUD) upgraded to Hold from Underperform at Jefferies
CF Industries (CF) upgraded to Neutral from Underperform at BofA/Merrill
Target (TGT) upgraded to Buy from Hold at Deutsche Bank

CDW (CDW) downgraded to Underweight from Neutral at JPMorgan
GlycoMimetics (GLYC) downgraded to Hold from Buy at SunTrust
Williams (WMB) downgraded to Market Perform from Outperform at Bernstein

Before the open: Aircastle (AYR), Black Knight (BKI), Colfax (CFX), Dean Foods (DF), Discovery Communications (DISCA), Duke Energy (DUK), Energizer Holdings (ENR), GreenSky (GSKY), Henry Schein (HSIC), Intrepid Potash (IPI), Kamada (KMDA), LGI Homes (LGIH), Mosaic (MOS), Novanta (NOVT), Pitney Bowes (PBI), Ryman Hospitality Properties (RHP), SeaWorld Entertainment (SEAS), Shutterstock (SSTK), Tenneco (TEN), Unit (UNT), Vonage Holdings (VG), Welbilt (WBT), Zoetis (ZTS)

After the close: ​​​​ADT (ADT), Beacon Roofing Supply (BECN), Cubic (CUB), Devon Energy (DVN), Extended Stay (STAY), Great Ajax (AJX), HCI Group (HCI), IntriCon (IIN), j2 Global Communications (JCOM), Key Tronic (KTCC), Lending Club (LC), Match Group (MTCH), Noodles & Company (NDLS), Papa John’s (PZZA), Red Rocks Resorts (RRR), Southwest Gas (SWX), Team (TISI), Vivus (VVUS), Weight Watchers International (WW), Zagg (ZAGG)

Tuesday’s economic reports (EST): 
Redbook - 8:55am
Jolts - 10:00am

Gold closed at $1,476.50 an ounce, up $19.00
Silver settled at $16.39 an ounce, up $0.12
Copper finished at $2.54 a pound, down $0.03
Crude Oil was at $54.08 a barrel, down $1.11
Bitcoin Investment Trust (GBTC) ended at $14.60, up $0.42

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

   Todd Mitchell

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