Prior Resistance Levels in Focus

The stock market showed continued strength on Wednesday following upbeat earnings from two blue-chips companies along with a rise in yields. Specifically the 10-year Treasury yield rose to nearly 1.3% after tapping a five-month low on Monday while stabilizing on Tuesday.

The drop in rates caught Wall Street by surprise and remains a possible sign of a slowing economy due to the new coronavirus variant. The gains helped recover the losses from Monday for all of the major indexes.

The Russell 2000 led the rally for the second-straight session after closing at 2,234 (+1.8%) with the high at 2,236. Prior and lower resistance at 2,225-2,250 was cleared and held. A move above the latter and the 50-day moving average would suggest a retest towards 2,275-2,300. 

The Nasdaq traded to a high of 14,633 before finishing at 14,631 (+0.9%). Lower resistance at 14,500-14,650 was recovered. A pop above the latter would indicate another run towards 14,850-15,000 with the recent all-time peak at 14,803.

The S&P 500 topped out at 4,359 before ending at 4,358 (+0.8%). Key resistance at 4,350 was cleared and held. Continued closes above this level keeps additional upside towards 4,375-4,400 in play with last week’s record high at 4,393.

The Dow settled at 34,681 (+0.8%) following the late day bounce to 34,708. Key resistance at 34,750 was breached and held. Continued closes above this level would signal another push towards 35,000 with the record peak from early May at 35,091.

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ANALYST UPGRADES/DOWNGRADES

Allegiant Travel (ALGT) upgraded to Buy from Neutral at MKM Partners
Electronic Arts (EA) upgraded to Buy from Hold at Deutsche Bank
Westlake Chemical (WLK) upgraded to Outperform from Sector Perform at RBC Capital

Afya (AFYA) downgraded to Equal Weight from Overweight at Morgan Stanley
ContextLogic (WISH) downgraded to Neutral from Buy at BofA
LoanDepot (LDI) double-downgraded to Underperform from Buy at BofA

THURSDAY'S EARNINGS ANNOUNCEMENTS 
Before the open:  Abbott (ABT), AT&T (T), Biogen (BIIB), Brink's Company (BCO), Cleveland-Cliffs (CLF), Crocs (CROX), D.R. Horton (DHI), Domino's Pizza (DPZ), Dow Chemical (DOW), Freeport-McMoRan Copper & Gold (FCX), Genuine Parts Company (GPC) Heritage Financial (HFWA), Marsh & McLennan Companies (MMC), Newmont Mining (NEM), Pool (POOL), Quest Diagnostics (DGX), Reliance Steel & Aluminum (RS), Snap-On (SNA), Sonoco (SON), Trinity Industries (TRN), Union Pacific (UNP), Webster Financial (WBS)

After the close: Ameris Bancorp (ABCB), Boston Beer Company (SAM), Capital One Financial (COF), Del Taco Restaurants (TACO), First Financial Bancorp (FFBC), Glacier Bancorp (GBCI), Hilltop Holdings (HTH), Intel (INTC), Robert Half International (RHI), Skechers U.S.A. (SKX), Snap (SNAP), Twitter (TWTR), U.S. Xpress Enterprises (USX), VeriSign (VRSN), W.R. Berkley (WRB)
Economic news:

THURSDAY'S ECONOMIC NEWS
Jobless Claims - 8:30am
Existing Home Sales - 10:00am

METALS/ OIL
Gold closed at $1,803.40 an ounce, down $8.00
Silver settled at $25.25 an ounce, up $0.25
Copper finished at $4.27 a pound, up $0.01
Crude Oil was at $70.22 a barrel, up $2.90
Bitcoin Investment Trust (GBTC) ended at $26.03 up $2.01

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

 Todd Mitchell

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