Bears Crack Major Support Levels

U.S. markets showed strength on Tuesday’s on U.S.-China trade optimism following news that China has permitted tariff waivers for U.S. soybean imports. However, calls for the impeachment of President Trump and his dealings with Ukraine sent the major indexes into a tailspin.

A slight rebound resumed after President Trump responded by saying he would declassify the transcript with the Ukraine President. Nervousness remained into the close as Wall Street awaited further details from House speaker Nancy Pelosi on the impeachment process.

The Russell 2000 plummeted 1.6% after testing an intraday low of 1,530. Prior and upper support from early August at 1,530-1,515 and the 50-day moving average was challenged but held with risk towards 1,500-1,485 on a close below 1,515 and the 200-day moving average.

The Nasdaq tanked 1.5% following the late day back-test to 7,969. Prior support from earlier this month at 8,000-7,950 was breached but held with the close below the 50-day moving average and the 8,050 level being a cautious signal.

The S&P 500 fell 0.8% following the 2nd half fade to 2,957. Prior and upper support at 2,975 failed to hold with a move below 2,950 and the 50-day moving average signaling additional weakness.

The Dow lost 0.5% after testing a late day low of 26,704. Near-term and crucial support at 26,800 was breached but held with a close below 26,600 and the 50-day moving average being a bearish development.

Utilities and Consumer Staples were the only sectors that showed strength after rising 1.2% and 0.4%, respectively. Energy and Communications Services were the leading sectors laggards after stumbling 1.6% and 1.5%, respectively.