Articles from the Experts

The stock market showed continued weakness on Wednesday after October’s consumer price reading showing the biggest annual jump in more than 30 years. The index surged 6.2% from a year ago and well above forecasts of 5.9%.

The yield on the benchmark 10-year Treasury soared over 10 basis points which contributed to the pullback in Tech with investors turning to gold and bitcoin as safe havens.

The Nasdaq settled at 15,622 (-1.7%) with the intraday low hitting 15,543. Fresh and upper support at 15,650-15,500 failed to hold. A drop below the latter would be an ongoing bearish development with additional risk towards 15,400-15,250.

The Russell 2000 tested an afternoon low of 2,380 while ending at 2,389 (-1.6%). Prior and upper support 2,400-2,375 was tripped and failed to hold. A move below the latter would indicate a further slide towards 2,350-2,325. 

The S&P 500 bottomed at 4,630 before ending at 4,646 (-0.8%). New and upper support at 4,650-4,625 failed to hold. A close below the latter would suggest a retest towards 4,600-4,575.

The Dow tapped a second half low of 36,009 before finishing at 36,079 (-0.7%). Current and upper support at 36,250-36,000 was breached and failed to hold. A move below the latter would signal a further fade towards 35,750-35,500.

The stock market fell on Tuesday as the producer price index showed inflation continues to gather steam; demand rose 0.6% in October with the core index edging up 0.4%. On an annual basis, the headline index was unchanged at 8.6% year-over-year from September, with the ex-food and energy index steady at 6.8%.

The losses ended a multi-day rally of consecutive record closing highs while halting an 11-session run for Tech and an eight-session winning streak for the broader market. Meanwhile, volatility held key resistance after rising for the fourth-straight session.

The Russell 2000 settled at 2,427 (-0.6%) with the morning low reaching 2,414. Fresh and upper support 2,425-2,400 failed to hold. A drop below the latter would suggest ongoing weakness towards 2,375-2,350. Below is a chart of the IWM.

The Nasdaq traded to an intraday low of 15,836 while closing at 15,886 (-0.6%). New and upper support at 15,900-15,750 was breached and failed to hold. A move below the latter would indicate a further pullback towards 15,650-15,500.

The S&P 500 tested a low of 4,670 before finishing at 4,685 (-0.4%). Current and upper support at 4,675-4,650 was tripped but held. A move below the latter would be a slightly bearish development with additional weakness towards 4,625-4,600.

The Dow ended at 36,319 (-0.3%) after bottoming at 36,173. Near-term and upper support at 36,250-36,000 was breached but held. A close below the latter will likely lead to a retest towards 35,750-35,500

The stock market showed continued strength on Monday despite hawkish comments from a Fed official, who said he expects two interest rate hikes in 2022. Additionally, James Bullard said he sees strong growth, but continuing supply chain problems.

Much of the bullishness came after Congress passed the Infrastructure Investment and Jobs Act, which invests in roads, railways, bridges, and broadband. The news pushed the small-caps and the blue-chips to another round of record highs with Tech extending its winning streak to 11-straight sessions.

The Dow closed at 36,432 (+0.3%) after testing a lifetime peak of 36,565. Fresh resistance at 36,500 was cleared but held. Continued closes above this level would suggest ongoing strength towards 36,750-37,000.

The Russell 2000 finished at 2,442 (+0.2%) after hitting an all-time high of 2,458. Unchartered territory and key resistance at 2,450 was cleared but held. Continued closes above this level would indicate momentum towards 2,475-2,500. Below is a chart of the IWM.

The Nasdaq traded to a high of 16,038 before ending at 15,982 (+0.1%). Key resistance at 16,000 was breached but held for the second-straight session. Continued closes above this level and Friday’s record high of 16,053 would be an ongoing bullish development for a trip towards 16,150-16,400.

The S&P 500 kissed an opening high of 4,714 before settling at 4,701 (+0.1%). Current and lower resistance at 4,700-4,725 was cleared and held. A move above the latter and the record high of 4,718 would signal a run towards 4,750-4,775.