The market closed lower on Friday, notching a third-straight weekly loss excluding the small-caps, amid uncertainty about a fresh round of fiscal stimulus from Washington. Weaker-than-expected economic news and concerns about tensions between the U.S. and China also weighed on sentiment.
The choppy trading action also marked quadruple witching and happens on the third Friday of every March, June, September and December. Volatility tends to heighten and when four classes of option contracts expire. The losses pushed the major indexes back into prior trading ranges with current volatility actually closing lower for the session.
The S&P 500 settled at 3,319 (-1.1%) after testing a late day low of 3,292 on the close back below its 50-day moving average. Prior and upper support at 3,325-3,300 was breached and failed to hold. A close below the latter would suggest additional weakness towards 3,275-3,250.
The Nasdaq finished at 10,793 (-1.1%) following the afternoon fade to 10,639. Prior and upper support at 10,700-10,600 was breached but held. A drop below the latter would signal a further pullback towards 10,500-10,400 and levels from late July.
The Dow traded to an intraday low of 27,487 before ending at 27,657 (-0.9%). Prior and upper support at 27,500-27,250 was breached but held. A move below the latter and the 50-day moving average would indicate a further pullback towards 27,000-26,750.
The Russell 2000 showed strength on the open before tapping a low of 1,519 while finishing at 1,536 (-0.4%). Prior and upper support at 1,525-1,510 and the 50-day moving average was tripped but held. A close below the latter would reopen a further backtest towards 1,500-1,485.
For the week, the S&P 500 fell 0.7% and the Nasdaq was lower by 0.6%. The Dow slipped 8 points, or 0.03% while the Russell 2000 rallied 2.7%.
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MONDAY'S ECONOMIC NEWS
Chicago Fed National Activity Index - 8:30am
Gold closed at $1,962.10 an ounce,