Crucial Support Levels Holding

U.S. markets struggled throughout Monday’s action despite bond markets being closed for the Columbus Day holiday. Wall Street was looking for a rebound and got some nice pin action in the final hour of trading but the weakness was once again being blamed on the recent rise in bond yields.

Global markets were slammed and also contributed to the tone along with the ongoing U.S. trade fight with China. The mixed finish offered hints of a possible bottoming process, but the VIX remains elevated after triggering another level of fresh resistance.

The Dow climbed 0.2% after erasing a 224-point deficit while reaching a peak of 26,529. Prior resistance at 26,600-26,800 is back in play on continued closes above 26,400-26,350.

The S&P 500 slipped a point, or 0.04%, following the backtest to 2,862. Support at 2,875-2,865 and the 50-day moving average was stretched but held with a close below 2,850 being a continuing bearish development.

The Russell 2000 dipped 0.2% after testing a 3rd-straight lower low of 1,616. May support at 1,620-1,610 and the 200-day moving average held for the second-straight session with a close below the latter likely leading to panic selling.

The Nasdaq fell 0.7% following the intraday plunge to 7,654. Late July and lower support at 7,700-7,650 held on a dime with a close above 7,800 signaling a possible short-term bottom.

Consumer Staples and Real Estate jumped 1.4% and 1.3% to show the most sector strength. Utilities and Financials soared 0.8% and 0.7%.

Technology and Communication Services paced sector weakness after falling 1.1% and 0.3%, respectively.


Conagra Brands (CAG) upgraded to Buy from Neutral at UBS
General Electric (GE) upgraded to Overweight from Equal Weight at Barclays
Willis Towers Watson (WLTW) upgraded to Outperform from Neutral at Credit Suisse
Glu Mobile (GLUU) downgraded to Neutral from Buy at Roth Capital
Kimberly-Clark (KMB) downgraded to Neutral from Buy at Goldman Sachs
Waters (WAT) downgraded to Market Perform from Outperform at Leerink


Tuesday’s earnings announcements (EST): 

Before the open: Azz (AZZ), Helen of Troy (HELE)
After the close: IDT (IDT)

Tuesday’s Economic Reports (EST):
NFIB Small Business Optimism Index – 6:00am
Redbook – 8:55am


Gold closed at $1,188.60 an ounce, down $17.00

Silver settled at $14.33 an ounce, down $0.32

Copper finished at $2.77 a pound, up $0.01

Crude Oil is at $74.25 a barrel, down $0.04

Bitcoin Investment Trust (GBTC) ended at $7.88 up $0.58

I hope this helps you prepare for tomorrow. Have a great evening.

   Todd Mitchell