Small-Caps Push Fresh Monthly Low

U.S. markets edged cautiously higher to start Tuesday’s session as optimism over the U.S.-China trade outlook carried over from the previous session. However, the apparent chatter, if ongoing calls have been happening, or not, derailed sentiment as President Trump's apparent walk back of his trade war stance has mollified Wall Street.

The small-caps showed the most weakness after tapping a fresh monthly low while volatility closed above a key level of resistance. The current action appears to be indicating additional weakness for the remaining 3 trading days of August and ahead of the upcoming 3-day holiday weekend.

The Russell 2000 sank 1.4% after tapping a 2nd half low of 1,454. Prior and major support at 1,460 was breached for the 3rd time this month and failed to hold with risk towards 1,440-1,425 on continued weakness.

The Dow declined 0.5% after failing to hold the 26,000 level shortly after the open. Upper support at 25,800-25,600 was breached and failed to hold on the fade to 25,721 afterwards with a close below the latter and the 200-day moving signaling additional weakness.

The Nasdaq gave back 0.3% following the midday back-test to 7,795. Current and upper support at 7,800-7,750 was breached but held with risk towards 7,700-7,650 and fresh monthly lows on a close below the latter.

The S&P 500 was also down 0.3% after trading to an intraday low of 2,860. Near-term and upper support at 2,875-2,850 failed to hold into the close with a move below the latter getting 2,825-2,800 back in play.

Utilities and Communications Services showed the most sector strength after rising 0.2% while Materials edged up 0.1%. Energy, Financials and Healthcare led sector laggards after falling 0.6%.

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Exelon (EXC) upgraded to Overweight from Equal Weight at Morgan Stanley
Verizon (VZ) upgraded to Outperform from Perform at Oppenheimer
WW (WW) upgraded to Buy from Hold at Craig-Hallum

Cardinal Health (CAH) downgraded to Hold from Buy at Argus
Red Robin (RRGB) downgraded to Underperform from Neutral at BofA/Merrill
T-Mobile (TMUS) downgraded to Perform from Outperform at Oppenheimer

Before the open: Abercrombie & Fitch (ANF), BestBuy (BBY), Burlington Stores (BURL), Dollar General (DG), Dollar Tree Stores (DLTR), Hain Celestial Group (HAIN), Malibu Boats (MBUU), Patterson Companies (PDCO), Sanderson Farms (SAFM), TD Bank Group (TD), Tech Data (TECD), Titan Machinery (TITN)

After the close: ​​Ambarella (AMBA), Cooper Companies (COO), Dell Technologies (DELL), Marvell Technology (MRVL), Ulta Beauty (ULTA), Workday (WDAY), Yext (YEXT)

Wednesday’s economic reports (EST): 
MBA Mortgage Applications - 7:00am
State Street Investor Confidence - 10:00am
Survey of Business Uncertainty - 11:00am

Gold closed at $1,551.80 an ounce, up $14.60
Silver settled at $18.15 an ounce, up $0.51
Copper finished at $2.55 a pound, up $0.01 
Crude Oil was at $54.94 a barrel, up $1.14
Bitcoin Investment Trust (GBTC) ended at $12.73, down $0.28

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

   Todd Mitchell

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