Covid Concerns Return on Massive Selloff

The stock market plunged on Friday following a new coronavirus variant from South Africa which fanned worries fresh lockdowns could be imposed if the variant spreads widely. The small-caps and the blue-chips posted their worst day of the year with the latter representing its third worst Black Friday selloff ever.

Trading volumes were low due to the Thanksgiving holiday which may have exacerbated the spike in volatility. While it’s not clear the impact this new variant will have on economic growth, investors were extremely nervous as they dumped stocks ahead of the weekend.

The Russell 2000 tested a low of 2,215 while finishing at 2,245 (-3.7%) and back below its 200-day moving average. Prior and upper support from mid-October at 2,225-2,200 was tripped but held. A move below the latter would indicate a further slide towards 2,175-2,150. Below is a chart of the IWM.

The Dow tapped a low of 34,749 before finishing at 34,899 (-2.5%) and failing to hold its 50-day moving average. Prior and upper support at 34,750-34,500 was breached but held. A drop below the latter keeps downside pressure towards 34,250-34,000 and the 200-day moving average in play.

The S&P 500 bottomed at 4,585 before ending at 4,594 (-2.3%). Fresh and upper support at 4,600-4,575 failed to hold. A close below the latter would suggest a retest towards 4,550-4,525 and the 50-day moving average.

The Nasdaq settled at 15,491 (-2.2%) with the intraday low hitting 15,456. New and upper support at 15,500-15,350 was tripped and failed to hold. A fade below the latter would be an ongoing bearish development with additional downside risk towards 15,250-15,100 and the 50-day moving average.

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ANALYST UPGRADES/DOWNGRADES

None

MONDAY'S EARNINGS ANNOUNCEMENTS 
Before the open: ​​​​​​Frontline (FRO), Kuke Music (KUKE), Li Auto (LI), McLeodUSA (MCLD), Partner Communications (PTNR), Quhuo (QH), Yunji (YJ)

After the close: Arco Platform (ARCE), Golub Capital (GBDC), Navigator Holdings (NVGS), StoneX Group (SNEX)

MONDAY'S ECONOMIC NEWS
Pending Home Sales Index - 10:00am

METALS/ OIL
Gold closed at $1,785.50 an ounce, up $1.20
Silver settled at $23.11 an ounce, down $0.39
Copper finished at $4.29 a pound, down $0.17
Crude Oil was at $68.15 a barrel, down $10.35
Bitcoin Investment Trust (GBTC) ended at $44.33, down $2.09

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

 Todd Mitchell

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