Bulls Give Up Weekly Gains on Friday Selloff

The market closed at their lowest levels in roughly two weeks following Friday’s steep selloff and continued worries in the spike of coronavirus cases. Texas and Florida were forced to backtrack on reopening their economies as new cases rose further and a record number of fresh cases were also reported nationwide.

Financials led the Dow lower as the sector was hammered following the results of the Federal Reserve’s bank stress tests which resulted in a cap on dividends and stock buybacks. The losses erased the weekly gains the major indexes had built going into the session with the bears getting their 2nd weekly win over the past 3 weeks.

The Dow traded to a late day low of 24,971 before settling at 25,015 (-2.8%). Key support at 25,000 was breached but held with a close below this level and the 50-day moving average signaling additional risk towards 24,500.

The Nasdaq closed at 9,757 (-2.6%) with the afternoon low reaching 9,749. Crucial support at 9,750 was breached but held with a close below this level signaling weakness towards the 9,500 level.

The S&P 500 bottomed at 3,004 before going out at 3,009 (-2.4%). Near-term support at 3,000 was challenged but held with a move below this level signaling additional downside risk towards 2,975 and the 50-day moving average.

The Russell 2000 tapped a low of 1,375 before going out at 1,378 (-2.4%). Crucial support at 1,375 was challenged but held with a close below this level signaling additional downside risk towards 1,350 and the 50-day moving average. Below is a chart of the IWM which mirrors the small-caps.

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ANALYST UPGRADES/DOWNGRADES

Broadcom (AVGO) upgraded to Outperform from In Line at Evercore ISI
eBay (EBAY) upgraded to Buy from Hold at Deutsche Bank
NetApp (NTAP) upgraded to Buy from Neutral at BofA

Boeing (BA) downgraded to Market Perform from Outperform at Bernstein
Freshpet (FRPT) downgraded to Sell from Neutral at Citi
iRobot (IRBT) downgraded to Underperform from Neutral at BofA

MONDAY'S EARNINGS ANNOUNCEMENTS
​Before the open: China XD Plastics (CXDC), Jerash Holdings (JRSH), Just Energy Group (JE), RumbleOn (RMBL)

After the close: Global Cord Blood (CO), Herman Miller (MLHR), Micron Technology (MU)

MONDAY'S ECONOMIC NEWS
Chicago Fed National Activity Index - 8:30am

Existing Home Sales - 10:00am

METALS/ OIL
Gold closed at $1,780.30  an ounce, up $9.70
Silver settled at $18.03 an ounce, up $0.13
Copper finished at $2.68  a pound, up $0.02
Crude Oil was at $38.16  a barrel,
 down $0.88
Bitcoin Investment Trust (GBTC) ended at $9.70 down $0.44


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


   Todd Mitchell


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