U.S. markets showed strength on Monday’s open and made a run past last week’s 2019 highs following more detailed developments concerning U.S./ China trade talks. Reports say a deal could happen this month and the U.S. tariffs levied against China could end in exchange with China following up on its own promises to allow in more U.S. exports, among other measures.
The opening rally was immediately sold as the major indexes turned negative about 90 minutes afterwards and faced heavy selling pressure into the second half of action. Volatility tested mid-February resistance levels as the VIX surged nearly 25% intraday but was able to hold the 15 level into the closing bell.
The Russell 2000 remains in a 10-session trading range after sinking 0.9% and testing an intraday low of 1,564. Near-term and upper support at 1,575-1,560 was breached but held by a half-point with a close below 1,550 being a bearish development.
The Dow dropped 0.8% despite making a morning run to 26,155 but was the only index that didn’t clear last Monday’s intraday peak. The 544-point reversal to 25,611 split support at 25,750-25,500 on the close above the former.
The S&P 500 stumbled 0.4% after testing a midday low of 2,767 and closing back below the 2,800 level. Current and upper support at 2,775-2,750 was tripped but held with a close below the latter and the 200-day moving average being a bearish signal.
The Nasdaq gave back 0.2% following the pullback to 7,501 and a 142-point trading range. Near-term and upper support at 7,500-7,450 and the 200-day moving average held with a move below the latter being a bearish signal for additional weakness.
Materials and Real Estate led sector strength after rising 0.5% and 0.4%, respectively.
Healthcare led sector weakness after tumbling 1.3%. Financials and Industrials fell 0.6% and 0.5%.
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Foot Locker (FL) upgraded to Buy from Hold at Pivotal Research
Extended Stay America (STAY) upgraded to Buy from Neutral at Goldman Sachs with
Hertz (HTZ) upgraded to Buy from Neutral at Northcoast
Bed Bath & Beyond (BBBY) downgraded to Underweight from Equal Weight at Barclays
SunTrust (STI) downgraded to Neutral from Buy at UBS
Universal Health (UHS) downgraded to Neutral from Overweight at JPMorgan
Tuesday Before the Open (EST):
Armstrong Flooring (AFI), Ciena (CIEN), Dova Pharmaceuticals (DOVA), GMS (GMS), Kohl’s (KSS), Nio (NIO), Sina (SINA), Target (TGT), Weibo (WB)
Tuesday After the close(EST):
Ambarella (AMBR), Cooper Companies (COO), Eagle Bulk Shipping (EGLE), Fate Therapeutics (FATE), Great Ajax (AJX), Horizon Technology (HRZN), Inner Workings (INWK), Microvision (MVIS), Ooma (OOMA), Ross Stores (ROST), Seaspan (SSW), Urban Outfitters (URBN), Western Asset Mortgage (WMC)
UPCOMING ECONOMIC NEWS
Tuesday's Economic Reports (EST):
Redbook - 8:55am
PMI Services Index - 9:45am
New Home Sales - 10:00am
ISM Non-Manufacturing Index - 10:00am
Treasury Budget - 2:00pm
METALS / OIL
Gold closed at $1,287.50 an ounce, down $11.70
Silver closed at $15.10 an ounce, down $0.16
Copper finished at $2.91 a pound, down $0.02
Crude Oil is at $56.44 a barrel, up $0.69
Bitcoin Investment Trust (GBTC) ended at $4.29, down $0.29
I hope this helps you prepare for the trading day. Make it a great one!
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