Bears Return to Push Support Levels

U.S. markets were choppy throughout Wednesday’s session and still jumpy over the inverted yield curve and what it’s implying in terms of global growth. German 10-year bonds were sold below zero at auction which kept downside pressure on U.S. treasury yields.

A cautious tone ahead of the U.S. and China trade talks set to resume on Thursday also weighed on sentiment despite President Trump expressing renewed optimism. Volatility was also jittery after testing prior resistance but levels that held into the closing bell.

The Nasdaq gave back 0.6% after trading to a low of 7,582. Prior support at 7,650-7,600 was breached but held with a move below the latter signaling additional weakness towards 7,500-7,450 and the 200/50-day moving averages.

The S&P 500 fell 0.5% after trading to a midday low of 2,787. Upper support at 2,800-2,775 was breached but held with a close below the latter likely leading to a continued backtest towards 2,750 and the 50/200-day moving averages.

The Russell 2000 declined 0.4% following the pullback to 1,505 and failure to clear and hold its 50-day moving average for the 3rd-straight session. Upper support at 1,500-1,490 held with risk to 1,485-1,475 on a move below the latter.

The Dow was down 0.1% following the intraday tumble to 25,425. Upper support at 25,500-25,250 and the 50-day moving average held with risk towards 25,000 and the 200-day moving average on a move below the latter.

Industrials was the only sector that closed higher after adding 0.1%.

Healthcare paced sector laggards after dropping 0.8%. Communication Services, Utilities and Energy were lower by 0.7%.

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

   Todd Mitchell