Bears Get Back-to-Back Wins

U.S. markets showed weakness for the 2nd-straight finish while closing lower as the start of 4Q earnings season heats up this week. Tech and the small-caps were hit the hardest as the overall market had it first back-to-back loss of the year.

Concerns over an economic slowdown in China also dampened sentiment along with a flood of Fed speak due the rest of the week. Volatility rose but held a key level of resistance.

The Russell 2000 tanked 1% after testing an intraday low of 1,431. Upper support at 1,435-1,425 was breached and failed to hold with a move below 1,420 being a slightly bearish signal.

The Nasdaq dropped 0.9% following the backtest to 6,887. Fresh and upper support at 6,950-6,900 was breached with the latter holding into the closing bell.

The S&P 500 was lower by 0.5% after testing a low of 2,570. Near-term and upper support at 2,575-2,550 held with a close below the latter being a slightly bearish signal.

The Dow dipped 0.3% following the pullback to 23,765 and 2nd-straight close below the 24,000 level. Fresh and upper support at 23,800-23,600 held with a move below 23,500 being a bearish development.

Financials gained 0.6% and were the only sector that showed strength.

Utilities were hammered for 2.3% and easily led sector laggards. Healthcare and Technology were down 1.1% and 0.9%, respectively.

Alcoa (AA) upgraded to Buy from Neutral at Goldman Sachs
Emerson (EMR) upgraded to Neutral from Sell at Citi
Northrop Grumman (NOC) upgraded to Outperform from Neutral at Credit Suisse

Arconic (ARNC) downgraded to Neutral from Overweight at JPMorgan
Delta Air Lines (DAL) downgraded to Neutral from Buy at BofA/Merrill
XPO Logistics (XPO) downgraded to Sector Weight from Overweight at KeyBanc

Tuesday Before the Open (EST):
​​Delta Air Lines (DAL), First Republic Bank (FRC), IHS Markit (INFO), JPMorgan Chase (JPM), Synovus Financial (SNV), UnitedHealth Group (UNH), Wells Fargo (WFC)

Tuesday After the Close (EST): Fulton Financial (FULT), Hanmi Financial (HAFC), Pinnacale Financial Partners (PNFP), United Continental (UAL)

Tuesday’s Economic Reports (EST):
PPI-FD – 8:30am
Empire State Manufacturing Survey – 8:30am


Gold closed at $1,291.30 an ounce, up $1.80
Silver settled at $15.69 an ounce, up $0.03
Copper finished at $2.63 a pound, down $0.03
Crude Oil is at $50.69 a barrel, down $0.99
Bitcoin Investment Trust (GBTC) ended at $4.47,
up $0.15

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

Todd Mitchell