U.S. markets traded on both side of the ledger on Tuesday before settling mixed with the S&P 500 and Nasdaq setting fresh intraday and all-time closing highs. Another solid report from the housing market mostly outweighed the relentless uncertainties over the coronavirus, re-openings and the overall economic recovery.
The Nasdaq was up for the 2nd-straight session and for the 4th time in 5 after adding 0.7% while tapping a late day and all-time high of 11,230. Uncharted territory and lower resistance at 11,150-11,250 was cleared and held. A close above the latter would suggest additional momentum towards the 11,350-11,450 area.
The S&P 500 climbed 0.2% after trading to a record high of 3,395 shortly after the opening bell. Fresh and lower resistance at 3,400-3,425 was challenged but held. A move above the latter would signal additional upside towards 3,450-3,475.
The Russell 2000 sank 1% following the intraday tumble to 1,566. Current and upper support at 1,575-1,560 was breached and failed to hold. A close below the latter would signal a further pullback towards 1,550-1,535.
The Dow was down 0.2% with the first half low kissing 27,668. Near-term and upper support at 27,750-27,650 was breached but held. A drop below the latter would indicate additional weakness towards 27,600-27,500.
Communication Services showed the most sector strength for the 2nd-straight session after rising 0.9% while Consumer Discretionary was up 0.6%. Energy was the weakest sector after sinking 1.3% while Financials and Industrials were down 0.7% and 0.6%, respectively.
European markets settled lower across the board with the Financial and Energy sectors leading the losses.
The Belgium20 sank 1% and UK’s FTSE 100 gave back 0.8%. France’s CAC 40 was down 0.7% and the Stoxx 600 was lower by 0.6%. Germany’s DAX 30 fell 0.3%.
Asian markets were mixed following news Japanese Prime Minister Shinzo Abe underwent a medical check-up in hospital, raising worries about his health.
Australia’s S&P/ASX 200 advanced 0.8% and China’s Shanghai climbed 0.3%. Hong Kong’s Hang Seng edged up 0.1%. South Korea’s Kospi tumbled 2.5% while Japan’s Nikkei fell 0.3%.
Housing Starts climbed 22.6% in July to a hefty 1,496,000, topping forecasts for a print of 1,240,000, and follows the 17.5% June surge to 1,220,000. Most of the strength was in the multifamily sector where starts popped 58.4% to 556,000 after the 13.2% jump to 351,000. Single family starts were up 8.2% to 940,000 following June’s 19.4% surge to 869,000.
Building Permits jumped 18.8% to 1,495,000 after June’s 3.5% increase to 1,258,000. Forecasts were at 1,300,000.
Chain store sales bounced 1.4% last week, following a -1.5% drop previously. The pace of contraction continues to erode and improved to -5.3% year-over-year from -6.8% in the prior week, and -7.9% in the week before that. The back-to-school shopping season has been impacted by the pandemic, with technology replacing traditional school supplies and clothing.
Redbook Store Sales down -2.8% for the year in the week ending August 15th.
The iShares 20+ Year Treasury Bond ETF (TLT) was up for the 2nd-straight session with the afternoon high hitting $164.87. Prior and lower resistance at $164.50-$165 was cleared and held. A close above $165.50 and the 50-day moving average would be an ongoing bullish signal of a near-term bottom with additional hurdles at $166-$166.50.
Rising support is at $164-$163.50 followed by $163-$162.50.
The S&P 500 Volatility Index ($VIX) was up for the just the 2nd time in 13 sessions after testing an intraday high of 22.55. Current and lower resistance 22.50-23 was breached but held with backup help at 24.50-25.
Support remains at 21.50-21 with a close below the 20 level and the monthly low at 20.28 being an ongoing bullish signal for the market.
The Spiders Dow Jones Industrial Average ETF (DIA) remains in a mini 6-session trading range following the pullback to $277.11. Current support at $277.50-$277 was breached but held. A drop below the latter would indicate a further backtest towards $276.50-$276.
Resistance is at $279.50-$280 followed by $281.50-$282 with last week’s peak at $281.78.
RSI is in a slight downtrend with upper support at 65-60 holding. A move below the 60 level would suggest additional weakness towards 55-50 with the latter holding since late June. Resistance at 70. A close above this level would indicate additional strength towards 75 and early June high.
The Dow Jones Transportation Average ($TRAN) is also in a 6-session trading range following the late day pullback to 10,853 and strong breakout from the start of the month off the 10,000 level. Current and upper support at 10,900-10,800 was breached and failed to hold. A close below the 10,750 level would suggest additional weakness towards the 10,600-10,500 area.
Near-term resistance is at 11,000-11,100. A close above the latter would indicate additional strength with upside potential towards 11,250-11,350 and levels from mid-January.
RSI is in a downtrend with upper support at 75-70 failing to hold. A close below the latter would signal additional weakness towards 65-60. Overbought resistance is at 80 and the monthly peak.