Bears Crack Key Technical Support Levels

The stock market took a beating on Monday as Wall Street fretted over the potential ripple effects and the default of a major Chinese real estate company, as well as ongoing debates concerning the U.S. debt limit. All the the major S&P sectors declined with Energy and Financials sinking 3.1% and 2.3%, respectively.

The Russell 2000 settled at 2,182 (-2.4%) with the midday low reaching 2,155. Prior and upper support from mid-August at 2,175-2,150 was tripped but held on the close back below the 200-day moving average. A drop below the latter would suggest ongoing weakness towards 2,125-2,100. 

The Nasdaq traded to an intraday low of 14,530 before closing at 14,713 (-2.2%). Upper support at 14,750-14,600 was breached and failed to hold on the close back below the 50-day moving average. A fall below the latter would indicate a further pullback towards 14,500-14,350.

The Dow ended at 33,970 (-1.8%) after kissing a low of 33,613. Prior and upper support from mid-July at 33,750-33,500 was breached but held. A close below the latter will likely lead to a further fade towards 33,250-33,000 and the 200-day moving average.

The S&P 500 tested a low of 4,305 before finishing at 4,357 (-1.7%). Mid-July and upper support at 4,325-4,300 was violated but held on the close back below the 50-day moving average. A move below the latter be an ongoing bearish development with additional weakness towards 4,275-4,250.

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Analog Devices (ADI) upgraded to Overweight from Neutral at JPMorgan
Colgate-Palmolive (CL) upgraded to Buy from Hold at Deutsche Bank
Ruth's Hospitality (RUTH) upgraded to Overweight from Neutral at Piper Sandler

Protagonist Therapeutics (PTGX) downgraded to Neutral from Overweight at JPMorgan
Texas Instruments (TXN) downgraded to Neutral from Buy at Longbow
Upstart (UPST) downgraded to Neutral from Buy at Citi

Before the open: Apogee Enterprises (APOG), AutoZone (AZO), Cracker Barrel Old Country Store (CBRL), Neogen (NEOG)

After the close: Adobe (ADBE), Aurora Cannabis (ACB), FedEx (FDX), InnovAge Holding (INNV), IsoRay (ISR), Stitch Fix (SFIX)

​Building Permits - 8:30am
Housing Starts - 8:30am
Current Account - 8:30am

Gold closed at $1,763.80 an ounce, up $12.40
Silver settled at $22.20  an ounce, down $0.14
Copper finished at $4.11 a pound, down $0.14
Crude Oil was at $70.90 a barrel,  down $1.06
Bitcoin Investment Trust (GBTC) ended at $34.56 down $3.15

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

 Todd Mitchell

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