The Nasdaq plunged 2.8% after trading to an intraday low of 7,193. Fresh and late October support at 7,200-7,150 held with the index giving back its gains for the month.

The S&P 500 sank 2% with the low reaching 2,722 on the close back below the 200-day moving average. Upper support at 2,725-2,700 held by a point with risk to 2,650-2,600 on a close below the latter.

The Dow tanked 2.3% following the pullback to 25,340 while closing back below its 50-day moving average.

Fresh and upper support at 25,400-25,200 failed to hold into the close with a move below the latter being a continued bearish signal.

The Russell 2000 fell 2% after tapping a session low of 1,518. Lower support at 1,525-1,520 was breached and keeps further risk towards 1,500-1,490 in play.

Real Estate gained 0.2% and was the only sector that showed strength.

Technology easily paced sector weakness after plummeting 3.5%.

Financials, Consumer Discretionary and Industrials were down 2.1%, respectively.

Global Economy – Germany’s DAX 30 dropped 1.8% and
the Stoxx 600 Europe fell 1%. France’s CAC 40 and the Belgium 20 were down 0.9% while UK’s FTSE 100 gave back 0.7%.

ECB Chief Economist Praet said the plan to cap bond-buying at the end of this year is not tantamount to a withdrawal of monetary policy accommodation, and significant stimulus is still needed to support inflation.

German November ZEW survey expectations of economic growth unexpectedly rose 0.6 to -24.1, stronger than estimates for a print of -26.

Asian markets

China’s Shanghai jumped 1.2%
Australia’s S&P/ASX 200 added 0.3%.
Japan’s Nikkei, and
South Korea’s Kospi edged up 0.1%.

China October new yuan loans checked in at 697 billion yuan, weaker than expectations of 904.5 billion yuan. October aggregate financing rose 728.8 billion yuan, weaker than forecasts of 1.300 trillion yuan.

The iShares 20+ Year Treasury Bond ETF (TLT) fell for the first time in 3 session following the backtest to $113.48. Fresh and upper support at $113.50-$113 was breached but held into the closing bell.

Resistance remains at $114-$114.50 with additional hurdles at $115-$115.50 and the 50-day moving average.

Market Analysis – The Russell 3000 Index ($RUA) closed lower for the 4th-straight session with Tuesday’s bottom reaching 1,600.

Shaky and near-term support is at 1,580-1,570 held.

A close below the latter would be a continued bearish development with risk towards 1,560-1,540 and late October lows.

Lowered resistance at 1,600-1,610 with more important hurdles at 1,630-1,640 and the 200-day moving average.

Continued closes back above 1,660 would be a slightly bullish development and a level that represents mid-October resistance and July to mid-August support.

However, the 50-day moving average remains in a downtrend and is 10-points away from triggering 1,660 and would add another later of harder resistance.

RSI is in a downtrend with support 35-30. A move below the latter would likely signaling another trip towards 25-20. Resistance is at 40.

The iShares PHLX Semiconductor ETF (SOXX) extended its losing streak to 4-straight sessions following the pullback to $158x?

Near-term and upper support at $157.50-$157 held.

A close below the latter would signal additional weakness towards $155-$152.50 with October and possible fresh 52-week lows in play.

Lowered resistance is at $160-$160.50?

We highlighted last month a death cross was in the process of forming with the 50-day moving average on track to fall below the 200-day moving average.

This produced the lower lows afterwards with a possible retest highly likely if there is no rebound this week.

RSI is in a downtrend with support at 30. A close below this level gets 25-20 and the October lows back in the mix. Resistance is at 35-40.

All the best,
Roger Scott