Bears Return to Crack Near-term Support Levels

U.S. markets closed lower on Tuesday after struggling to hold slight gains during the first half of action. News that President Trump is anxious about the economy and is contemplating various actions aimed at bolstering confidence and growth failed to help momentum.

Specifically, the President said he was looking at payroll and capital gains cuts along with 100 basis point cuts (over time) in interest rates. The major indexes closed just below near-term support levels on the pullback with volatility settling just above key resistance levels.

The S&P 500 was down 0.8% after trading to an intraday low of 2,899. Near-term and upper support at 2,900-2,875 was breached but held by a half-point with backup held at 2,850-2,825.

The Nasdaq was lower by 0.7% following the back-test to 7,948 and closed back below the 8,000 level. Current and upper support at 7,950-7,900 failed to hold with risk towards 7,850-7,800 on a close below the latter.

The Dow declined 0.7% after trading in a 208-point range while testing a late day low of to 25,952. Major support at 26,000 was breached and failed to hold to reopen risk towards 25,800-25,600 and the 200-day moving average.

The Russell 2000 fell 0.7% after tapping a late day low of 1,497. Prior and upper support at 1,500-1,485 was tripped and failed to hold with a close below the latter reopening risk towards 1,475-1,460.

Consumer Discretionary edged up 0.03% and was the only sector that showed strength. Financials and Materials paced sector laggards after sinking 1.4% and 1.2% while Consumer Staples and Energy dropped 1.1% and 0.9%, respectively.