Bulls Battle Back but VIX Holds 15

trade negotiations

U.S. markets opened Monday’s session with substantial losses following a weekend tweet from President Trump that trade talks with China are moving too slowly and that he plans on raising tariffs to 25% this Friday. The unexpected news hit the major indexes with losses well north of 1% before a quick rebound recovered half the losses roughly an hour later.

​The rest of the session was mostly flat with the final hour of trading seeing additional strength on news that a Chinese delegation was still headed to Washington this week. Volatility spiked to its highest level since late January while closing above 15 and a level that had been holding for 26-straight sessions.

The Nasdaq dropped 0.5% after opening at a session low of 7,981. Prior and upper support at 8,075-8,025 was breached but held with a close below the 8,000 level being a bearish development.

The S&P 500 also fell 0.5% after trading to a morning low of 2,898. Major and lower support at 2,925-2,900 was breached but held on the close above the former with risk towards 2,875-2,850 and the 50-day moving average on a close below the latter.

The Dow declined 0.3% following the opening pullback to 26,033. Major and lower support at 26,250-26,000 held with the latter and the 50-day moving average holding into the closing bell?

The Russell 2000 was up 0.1% despite the opening backtest to 1,588. Support at 1,585-1,570 was breached but held with a close below 1,565 and the 50/200-day moving averages being a warning sign for lower lows.

Healthcare was up 0.5% and was the only sector to show strength.

Materials sank 1.5% to lead sector weakness. Industrials and Technology were down 1% and 0.8%, respectively.

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Dentsply Sirona (XRAY) upgraded to Outperform from Market Perform at Barrington
Post Holdings (POST) upgraded to Buy from Neutral at Goldman Sachs
Sinclair Broadcast (SBGI) upgraded to Buy from Neutral at B. Riley FBR

Arrow Electronics (ARW) downgraded to Neutral from Buy at BofA/Merrill
Expedia (EXPE) downgraded to Neutral from Positive at Susquehanna
Ternium (TX) downgraded to Neutral from Overweight at JPMorgan

Before the open (EST):
​​Anheuser-Busch (BUD), Boise Cascade (BCC), Cinemark (CNK), Dean Foods (DF), Expeditors International (EXPD), Ferrari (RACE), GreenSky (GSKY), Jacobs Engineering (JEC), LGI Homes (LGIH), Mannkind (MNKD), Novanta (NOVT), Sotherly Hotels (SOHO), TransDigm Group (TDG), Vector Group (VGR), WideOpenWest (WOW)

After the close(EST):
​3D Systems (DDD), Alleghany (Y), Carrizo Oil & Gas (CRZO), Davita (DVA), Electronic Arts (ERTS), Farmer Brothers (FARM), Great Ajax (AJX), HubSpot (HUBS), Inogen (INGN), j2 Global Communications (JCOM), Lending Club (LC), Lyft (LYFT), Match Group (MTCH), Mylan (MYL), NCR (NCR), Papa John’s (PAPA), Qorvo (QRVO), Rent-A-Center (RCII), Scientific Games (SGMS), TripAdvisor (TRIP), Vectrus (VEC), Western Union (WU), Zagg (ZAGG)

Tuesday's economic reports (EST): 
​Redbook - 8:55am
Jolts - 10:00am
Consumer Credit - 3:00pm

Gold closed at $1,283.80 an ounce, up $2.50
Silver settled at $14.93 an ounce, down $0.05
Copper finished at $2.82 a pound, up $0.01
Crude Oil was at $62.70 a barrel, up $0.84
Bitcoin Investment Trust (GBTC) ended at $7.52 up $0.20

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

   Todd Mitchell

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