Bears Return, Get Weekly Win

U.S. markets were hammered on Friday as a closely watched measure of the yield curve, the 3-year and 10-year, inverted for the first time since 2007. Mixed economic news also helped refuel recession worries with the major indexes showing red from the open.

The selling pressure stabilized by midday until another wave of selling pressure resumed in the final hour of action. Volatility spiked over 20% while closing between major levels of resistance with the major indexes giving up their gains for the week.

The Russell 2000 plummeted 3.6% following the pullback to 1,505 and session low on the close back below the 50-day moving average. Early February and upper support at 1,500-1,490 held with risk to 1,485-1,475 on a move below the latter.

The Nasdaq tanked 2.5% after trading to a low of 7,642 on the close. Near-term support at 7,650-7,600 was breached and failed to hold with a move below the latter signaling additional weakness towards 7,500-7,450 and the 200-day moving average.

The S&P 500 sank 1.9% following the backtest to 2,800 and session low. Mid-month and upper support at 2,800-2,775 held with a close below the latter likely leading to a continued back-test towards 2,750 and the 200-day moving average.

The Dow dropped 1.8% following late day fade to 25,501 and closed a point above this level. Current and upper support at 25,500-25,2500 was held with risk towards 25,250-25,000 and the 50/200-day moving averages on continued weakness.

For the week, the Russell tumbled 3.2% and Dow fell 1.3%. The S&P 500 lost 0.8% and the Nasdaq was down 0.6%.

Utilities were the only sector to show strength after adding 0.7%.

Materials tumbled 3% to lead sector weakness. Financials and Energy gave back 2.8% and 2.7%, respectively.

For the week, Real Estate and Consumer Discretionary were higher by 1% while Consumer Staples gained 0.7%. Financials and Materials stumbled 2% and 1.9%, respectively, while Healthcare and Industrials gave back 1.5% and 1.4%.

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

   Todd Mitchell