VIX Pushes February Resistance as Small-Caps Tap 2-Year Lows

December 20, 2018 By: Amy Noon

U.S. markets showed continued weakness and downside momentum on Thursday with the major indexes setting another round of fresh 52-week lows. Much of the negative sentiment came from a looming government shutdown and the continued fallout from the Fed’s latest interest rate hike.

The market reached session lows late in the afternoon following news the President would not be signing a rushed and proposed spending bill, likely signaling a government shutdown. The slight rebound into the close was minimal as the technical damage over the past few months remains the more important picture.The Nasdaq tumbled 1.6% following the pullback to 6,447. Fresh support at 6,450-6,400 held with a move below the latter getting September 2017 levels at 6,350-6,300 in play.The Russell 2000 sank 1.7% after trading down to 1,313 during the second half of action. Two-year support at 1,325-1,300 is in play on the close above the former.The Dow dropped 2% after trading to an intraday low of 22,644. Longer-term support at 22,600-22,400 held with risk towards 22,250-22,000 and October 2017 support levels on a move below the latter.The S&P 500 was lower by 1.6% following the backtest to 2,441. Upper and major support from September 2017 at 2,450-2,425 with risk to 2,400 on a move below the latter.There was no sector strength for the 4th-straight session with Utilities down just 0.06% and was the least affected.Energy led sector weakness after sinking 2.8%. Consumer Discretionary tanked 2.2% while Industrials and Technology were hit for 1.8%.

ANALYST UPGRADES/DOWNGRADES

Humana (HUM) upgraded to Overweight from Neutral at JPMorganEricsson (ERIC) upgraded to Market Perform from Underperform at Raymond JamesSynovus (SNV) upgraded to Outperform from Neutral at BairdMacerich (MAC) downgraded to Sector Weight from Overweight at KeyBancEventbrite (EB) downgraded to Hold from Buy at StifelGreif (GEF) downgraded to Underperform from Outperform at BMO Capital

EARNINGS

Friday’s earnings announcements (EST):

Before the open: Carmax (KMX)After the close: No major announcements.

UPCOMING ECONOMIC NEWS Friday’s Economic Reports (EST):Durable Goods Orders – 8:30amGDP – 8:30amCorporate Profits – 8:30amPersonal Income and Outlays – 8:30amConsumer Sentiment – 10:00amKansas City Fed Manufacturing Index – 11:00amBaker-Hughes Rig Count – 1:00pm

METALS / OIL

Gold closed at $1,267.90 an ounce, up $11.50Silver settled at $14.87 an ounce, up $0.05

Copper finished at $2.70 a pound, down $0.02

Crude Oil is at $46.17 a barrel, down $1.89

Bitcoin Investment Trust (GBTC) ended at $4.63, up $0.32