Choppy Action Continues

The overall market was choppy on Wednesday after trading on both sides of the ledger while closing in the red for the second-straight session. Better-than-expected housing numbers and ongoing vaccine hopes provided strength on the open that fizzled midday.

The bears pushed lower lows but haven’t made much of a dent following the recent push to all-time highs by the bulls. The action is signaling a possible consolidation pattern developing but one that will provide key support and resistance levels to watch for the next breakout, or breakdown.

The Russell 2000 settled on its session low of 1,769 (-1.3%) despite tapping another record peak of 1,805. Fresh and upper support at 1,775-1,760 was breached and failed to hold. A close below the latter would suggest a further pullback towards 1,750-1,735.

The S&P 500 also closed on its session low at 3,567 (-1.2%). Near-term and upper support at 3,575-3,550 failed to hold. A drop below the latter would indicate further weakness towards 3,525-3,500.

The Dow tested a late day low of 29,432 before ending at 29,438 (-1.2%). Current and upper support at 29,500-29,250 was tripped and failed to hold. A move below the latter would suggest a continued back-test towards 29,000-28,750.

The Nasdaq kissed 11,799 ahead of the closing while finishing at 11,801 (-0.8%). Near-term and upper support at 11,900-11,800 was breached and but held. A close below the latter would indicate ongoing weakness towards 11,700-11,600.

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Boeing (BA) upgraded to Outperform from Neutral at Baird
Spirit AeroSystems (SPR) upgraded to Buy from Hold at Jefferies
Tesla (TSLA) upgraded to Overweight from Equal Weight at Morgan Stanley

Anterix (ATEX) downgraded to Underweight from Neutral at JPMorgan
Honeywell (HON) downgraded to Hold from Buy at HSBC
Tecnoglass (TGLS) downgraded to Outperform from Strong Buy at Raymond James

Before the open: BJ's Wholesale Club (BJ), Canadian Solar (CSIQ), Futu Holdings (FUTU), Höegh LNG Partners (HMLP), Macy’s (M), (NTES), OneWater Marine (ONEW), Qiwi (QIWI)

After the close: American Software (AMSWA), Beacon Roofing Supply (BECN), Caleres (CAL), Delta Apparel (DLA), Intuit (INTU), Matthews International (MATW), Ooma (OOMA), Post Holdings (POST), Ross Stores (ROST), Williams-Sonoma (WSM), Workday (WDAY)

Jobless Claims - 8:30am
NY Empire State Manufacturing Survey - 8:30am
Existing Home Sales - 10:00am
Kansas City Fed Manufacturing Index - 11:00am

Gold closed at $1,873.90 an ounce,  down $11.20
Silver settled at $24.45 an ounce, down $0.20
Copper finished at $3.20 a pound, up $0.23
Bitcoin Investment Trust (GBTC) ended at 19.64 down $0.52

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

   Todd Mitchell

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