U.S. markets were choppy throughout Monday's action with the major indexes preparing for the flood of 3Q earnings due out this week.
Tension between the U.S. and Saudi Arabia over the disappearance of a journalist and fresh China/ U.S. trade relations also weighed on sentiment.
President Trump threatened harsh measures against the guilty party, while the Saudis have said any retaliation would be met with whatever economic power they have, mainly oil.
Volatility was slightly elevated during the first half of trading but eased throughout the session while testing key support levels.
The Russell 2000 showed the most strength after adding 0.4% and testing an intraday peak of 1,562.
Near-term resistance at 1,560-1,565 held with more important hurdles at 1,575-1,580.
The Nasdaq was weak for much of the session after giving back 0.9% and tapping a low of 7,400.
Support at 7,400-7,350 held on the 2nd-straight close below the 200-day moving average.
The S&P 500 declined 0.6% following the morning backtest 2,749 and close below its 200-day moving average. Fresh and upper support at 2,750-2,725 held with a move below the latter signaling lower lows.
The Dow fell 0.4% after tapping a late day low of 25,243.
Support at 25,200-25,000 held with a move below the latter signaling additional weakness.
Real Estate and Consumer Staples showed the most sector strength after rising 0.6%.
Utilities were up 0.5% and Industrials edged up 0.2% to round out the winners.
Technology and Energy paced sector weakness after falling 1.6% and 0.8%.
Global Economy - European markets were mostly higher after U.K. Prime Minister Theresa May described Britain's chances of striking a trade pact from the EU as still achievable.
Germany's DAX 30 rose 0.8% and UK's FTSE 100 gained 0.5%.
The Stoxx 600 Europe climbed 0.1% while the Belgium20 edged up 0.04%. France's CAC 40 slipped a point, or 0.02%
ECB Governing Council member Rehn said the latest figures on core inflation were somewhat disappointing and that they will have to watch very carefully how underlying inflation materializes from now on.
Asian markets were lower across the board following fresh trade rhetoric from President Trump after saying he wants China to negotiate a fair deal with the United States.
He added he wants China to open their markets like the U.S. markets and that more tariffs could be in the mix.
Japan's Nikkei sank 1.9% while China's Shanghai tanked 1.5% to its lowest since November 2014. Hong Kong's Hang Seng's fell 1.4% and South Korea's Kospi was down 0.8%. Australia's S&P/ASX 200 gave back 1%.
PBOC Governor Yi Gang said China's monetary policy stance is prudent and neutral and China's money supply growth shows policy is not easing.
He added economic growth, employment, inflation and the two-way fluctuation of the yuan are within reasonable range.
Retail Sales rose 0.1% in September, while falling 0.1% excluding autos, both below estimates for gains of 0.6% and 0.4%, respectively.
The Empire State Manufacturing Survey rebounded 2.1 ticks to 21.1 in October, well above forecasts for a print of 19.3.
Business Inventories rose 0.5%, with sales up 0.5% as well in August, both matching expectations.
Atlanta Fed's Q3 GDPNow estimate was cut to 4% from 4.2% previously, but well above the Blue Chip consensus, which has risen to 3.3%.
Market Sentiment - Former Fed Chair Janet Yellen said 3% growth is great but it may not last at that level and said the Fed needs to move rates to neutral to stabilize the labor market.
She is worried about the economy overheating and said it's not desirable for the president to comment on Fed policy, since politicizing Fed policy risks undermining the institution.
Yellen warned that the yield curve has been a good recession signal in the past, but this time it might be different.
The iShares 20+ Year Treasury Bond ETF (TLT) tested a morning peak of $114.81 with lower resistance at $115-$115.50 holding.
We mentioned a close above $116 would complete a v-shape recovery but that pattern has changed with a mini trading range shaping up.
Upper support at $114.25-$113.75 held on the fade to $114.29 afterwards. A close below $113.50 would be a bearish development.
Market Analysis - The Spider S&P 500 ETF (SPY) made a intraday run to $277.04 with near-term resistance at $277-$277.50 holding. A close above the latter would be a slightly bullish development.
However, $280 needs to clear and hold to signal a possible short-term bottom.
Near-term support is at $274.25-$274 and the 200-day moving average held.
A close below the latter would be a possible warning signal for a continued backtest towards $272.50-$270.
RSI is back in a slight uptrend with resistance at 30-35. A move above the latter would be a continued bullish signal. Shaky support is at 25-20.
Bitcoin Investment Trust (GBTC) closed higher for a 2nd-straight session after making an intraday push to $7.45. Near-term and lower resistance at $7.50-$7.75 held.
A close above $8 would be a more bullish development but the 50-day moving average remains in a downtrend and is showing no signs of leveling out.
Support is at $7-$6.75. A move below the latter would be a continued bearish development and signal fresh 52-week lows.
RSI is nearing resistance at 45.
A move above this level could lead to a possible push towards 50. Support is at 35-30.
All the best,
Roger Scott.