Bears Win Sluggish Session

U.S. markets were sluggish throughout Monday’s session following a mixed bag of 1Q earnings from the Financial sector. The slack action comes ahead of a shortened trading week and follows last Friday’s rally to higher highs.

With the major indexes signaling slightly overbought levels, the chances of a continued backtest are high and would be a healthy signal before a possible run at all-time highs. Volatility rose slightly but easily held a key level of resistance.

The Russell 2000 was lower by 0.4% following the pullback to 1,574. Upper support at 1,575-1,570 and the 200-day moving average held with risk towards 1,555-1,550 and the 50-day moving average on a close below the latter.

The Dow dipped 0.1% after trading to a midday low of 26,316. Current and upper support at 26,250-26,000 held with a move below the latter opening up risk towards 25,750 and the 50-day moving average.

The S&P 500 slipped 2 points, or 0.1% following the backtest to 2,896 shortly after the open. Near-term and upper support at 2,900-2,875 was breached but held with a close below 2,850 being a slightly bearish development.

The Nasdaq also gave back 0.1% after testing an intraday low of 7,933. Upper support at 7,925-7,850 held with a move below 7,800 signaling a possible near-term top.

Consumer Staples led sector strength after rising 0.6%. Healthcare and Consumer Discretionary were higher by 0.3% and 0.2%, respectively.

Financials and Real Estate paced sector weakness after falling 0.7%. Industrials, Materials and Energy fell 0.6%.

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Disney (DIS) upgraded to Neutral from Sell at BTIG
Sony (SNE) upgraded to Buy from Hold at Jefferies
Western Digital (WDC) upgraded to Buy from Neutral at Longbow

CVS Health (CVS) downgraded to Perform from Outperform at Oppenheimer
Infosys (INFY) downgraded to Hold from Buy at Deutsche Bank
Wells Fargo (WFC) downgraded to Neutral from Conviction Buy at Goldman Sachs

Before the open (EST):
Disney (DIS) upgraded to Neutral from Sell at BTIG
Sony (SNE) upgraded to Buy from Hold at Jefferies
Western Digital (WDC) upgraded to Buy from Neutral at Longbow

After the close(EST):
CSX (CSX), Fulton Financial (FULT), Hope Bancorp (HOPE), Interactive Brokers (IBKR), International Business Machines (IBM), Mellanox Technologies (MLNX), Netflix (NFLX), United Continental (UAL), WesBanco (WSBC)

Tuesday’s economic reports (EST): 
Redbook - 8:55am
Industrial Production - 9:15am
Housing Market Index - 10:00am

Gold closed at $1,291.30 an ounce, down $3.90
Silver settled at $14.98 an ounce, up $0.03
Copper finished at $2.93 a pound, down $0.01
Crude Oil was at $63.48 a barrel, down $0.28
Bitcoin Investment Trust (GBTC) ended at $6.14 down $0.35

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

   Todd Mitchell

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