Near-Term Support Levels Holding

U.S. markets continued a choppy trend on Thursday but avoided lower lows as a flurry of economic news and political rhetoric dominated the headlines. In the latest twist in the U.S. trade drama with China, a government official is reported to have said that the U.S. is unlikely to extend a waiver allowing American companies to supply a major China Tech company.

The whipsaw action held near-term support levels but the lower highs from the previous session was a slight concern. Volatility was slightly heightened but was able to hold a key level of resistance for the 3rd-straight session.

The Russell 2000 tumbled 1.1% after trading to an intraday low of 1,531. Upper support at 1,530-1,515 and the 50-day moving average was challenged but held for the 3rd-straight session with a close below the latter getting 1,500-1,495 and the 200-day moving average In focus.

The Nasdaq gave back 0.6% following the morning pullback to 7,991. Near-term and upper support at 8,000-7,950 held for the 2nd-straight session with the close back below the 50-day moving average and the 8,050 level being a slightly bearish signal.

The Dow dropped 0.3% after failing key resistance at the 27,000 level on the opening run to 27,014. Near-term and crucial support at 26,800 was challenged but held on the backtest to 26,803 afterwards with a close below 26,600 and the 50-day moving average being a bearish development.

The S&P 500 was lower by 0.2% after tapping a 1st half low of 2,963. Key support at 2,975 was breached but held with a close below the 2,950 level and the 50-day moving average signaling additional weakness towards 2,925 and support from the beginning of the month.

Real Estate showed the most sector strength after rising 1% while Consumer Staples and Utilities added 0.6% and 0.5%, respectively. Energy and Communication Services were the leading sector laggards after sinking 1.3% and 1%, respectively, while Healthcare fell 0.6%.