VIX Holds 25 as Small-Caps Enter Bear Market

U.S. markets showed continued weakness on Monday after falling deeper into correction territory as Wall Street prepares for Wednesday’s Fed decision on interest rates. The small-caps fell into bear market territory after falling 20% below its all-time high from August while Tech gave up its gains for the year.

​The Dow fell 2.1% after trading to an intraday low of 23,456. Major support from May at 23,500 was breached but held with risk to 23,250 and fresh 52-week lows on a close below this level.

The S&P 500 stumbled 2.1% following the pullback to 2,530 and fresh 52-week low. Major support from April at 2,550 was breached and failed to hold with risk to 2,525-2,500 on continued weakness.

The Nasdaq gave back 2.3% after testing a late session low of 6,710. April support at 6,800 failed to hold with downside risk towards 6,650-6,600 and February lows on additional selling pressure.

The Russell 2000 was also down 2.3% after falling to a fresh 52-week low of 1,372. Fresh support at 1,370-1,365 held with a move below the latter getting 1,350-1,340 in play.

There was no sector strength for the 2nd-straight session.

Real Estate led sector weakness after sinking 3.7% while Utilities dropped 3.2%. Consumer Discretionary was lower by 2.5%

Barnes & Noble (BKS) upgraded to Buy from Hold at Craig-Hallum
Lululemon (LULU) upgraded to Buy from Hold at Stifel
Scotts Miracle-Gro (SMG) upgraded to Outperform from Market Perform at Raymond James

Best Buy (BBY) downgraded to Underperform from Neutral at BofA/Merrill
Centene (CNC) downgraded to Buy from Conviction Buy at Goldman Sachs
Illinois Tool Works (ITW) downgraded to Sell from Hold at Deutsche Bank

Tuesday’s earnings announcements (EST):

Before the open: Darden Restaurants (DRI), FactSet Research Systems (FDS), Lovesac (LOVE), Navistar International (NAV), Worthington Industries (WOR)
After the close: ABM Industries (ABM), FedEx (FDX), Jabil Circuit (JBL), Micron Technology (MUWealth Strength IndexAAPL is Extremely Up and trending Up), Steelcase (SCS)

Tuesday’s Economic Reports (EST):
Housing Starts – 8:30am
Redbook – 8:55am

Gold closed at $1,251.80 an ounce, up $10.40
Silver settled at $14.76 an ounce, up $0.12
Copper finished at $2.75 a pound, down $0.01
Crude Oil is at $49.13 a barrel, down $2.10
Bitcoin Investment Trust (GBTC) ended at $4.35
up $0.51

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

   Todd Mitchell