Volatility Returns on Market Pullback

Wall Street had a nasty session on Monday as rising concerns over the resurgence of coronavirus infections among the unvaccinated weighed on sentiment. The major indexes suffered their worst declines since May and ahead of a heavy week of quarterly earnings.

Volatility spiked 22% after closing above a key level of resistance with all of the major sectors closing lower. Energy and Financials were hit the hardest with losses of 3.5% and 2.8%, respectively.

The Dow ended at 33,962 (-2.1%) and back below its 50-day moving average with the midday low kissing 33,741. Fresh and upper support at 34,000-33,750 was tripped and failed to hold. A close below the latter would indicate further weakness towards 33,500-33,250 with the mid-June low at 33,271.

The S&P 500 tested a low of 4,233 before finishing at 4,258 (-1.6%). Prior and upper support at 4,250-4,225 was breached but held. A close below the latter and the 50-day moving average would suggest additional weakness towards 4,200-4,175 with the June low at 4,164.

The Russell 2000 settled at 2,130 (-1.5%) with the intraday low reaching 2,107. Prior and upper support from late March at 2,125-2,100 was breached but held. A close below the latter would suggest ongoing weakness towards 2,075-2,050 and the 200-day moving average. 

The Nasdaq tumbled to a low of 14,178 before closing at 14,274 (-1.1%). New and upper support at 14,250-14,100 was triggered but held. A move below the latter would signal ongoing weakness towards 14,000-13,850 and the 50-day moving average.

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ANALYST UPGRADES/DOWNGRADES

Alcoa (AA) upgraded to Conviction Buy from Buy at Goldman Sachs
CyberArk (CYBR) upgraded to Buy from Neutral at Colliers
Qualcomm (QCOM) upgraded to Neutral from Sell at Goldman Sachs

Ericsson (ERIC) downgraded to Hold from Buy at Argus
Kemper (KMPR) downgraded to Market Perform from Strong Buy at Raymond James
Neptune Wellness (NEPT) downgraded to Hold from Buy at Desjardins

TUESDAY'S EARNINGS ANNOUNCEMENTS 
Before the open: Ally Financial (ALLY), Badger Meter (BMI), Cambridge Bancorp (CATC), Dover (DOV), First Midwest Bancorp (FMBI), Halliburton (HAL), Iridium Communications (IRDM), KeyCorp (KEY), ManpowerGroup (MAN), Neogen (NEOG), Omnicom Group (OMC), Philip Morris International (PM), Signature Bank (SBNY), Silvergate Capital (SI), Travelers Companies (TRV), UBS (UBS)
After the close: AAR (AIR), Chipotle Mexican Grill (CMG), Forestar Group (FOR), Hancock Whitney (HWC), Interactive Brokers Group (IBKR), Intuitive Surgical (ISRG), Netflix (NFLX), Pinnacle Financial Partners (PNFP), Qualtrics (XM), Rexnord (RXN), Sleep Number (SNBR), United Airlines (UAL)

TUESDAY'S ECONOMIC NEWS
Building Permits - 8:30am
Housing Starts - 8:30am

METALS/ OIL
Gold closed at $1,809.20 an ounce, down $5.80
Silver settled at $25.14 an ounce, down $0.66
Copper finished at $4.20 a pound, down $0.12
Crude Oil was at $66.61 a barrel, down $5.20
Bitcoin Investment Trust (GBTC) ended at $25.25 down $0.95

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

 Todd Mitchell

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