Spider Small-Cap 600 ETF (SLY) Down 3-straight Sessions

The Spider Small-Cap 600 ETF (SLY) extended its losing streak to 3-straight sessions after trading to an intraday low of $51.08 while closing back below its 50-day moving average. Near-term and upper support at $51.50-$51 was breached but held. A close below the latter would be an ongoing bearish signal with additional pullback potential towards $50.50-$50.

Lowered resistance is at $52.50-$53 with additional hurdles at $54-$54.50.

RSI remains in a downtrend with upper support at 50-45 holding. A move below the latter would be a bearish signal for additional weakness towards 40-35 and early April levels. Resistance is at 55-60.

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Checking in on the VIX

The S&P 500 Volatility Index ($VIX) fell for the first time in 3 sessions despite testing a morning peak of 40.32. Current and lower resistance at 40-40.50 was breached but held with a move above the latter signaling additional strength towards 42-42.50.

Upper support at 35.50-35 was challenged but held on the afternoon fade to 35.53. A close below the latter would be a renewed bullish signal for a retest towards the 32.50-32 area.

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NextOptions.com Index and Earnings Options Play List for 5/5/2020

Before the open: AMC Networks (AMCX), Black Knight (BKI), Dominion Energy (D), Fiat Chrysler Automobile (FCAU), Gladstone Capital (GLAD), Haemonetics (HAE), Incyte (INCY), Jones Lang LaSalle (JLL), L3Harris Technologies (LHX), LendingTree (TREE), MGM Growth Properties (MGP), Newmont Mining (NEM), Premier (PINC), Sealed Air (SEE), TopBuild (BLD), US Foods Holding (USFD), Wayfair (W)

After the close: Activision Blizzard (ATVI), Beyond Meat (BYND), Cheesecake Factory (CAKE), Devon Energy (DVN), Electronic Arts (EA), FMC (FMC), Hackett Group (HCKT), Inogen (INGN), Jazz Pharmaceuticals (JAZZ), L.B. Foster (FSTR), Match Group (MTCH), Nautilus (NLS), Otter Tail (OTTR), Pinterest (PINS), Planet Fitness (PLNT), Retail Properties of America (RPAI), SBA Communications (SBAC), T2 Biosystems (TTOO), Vapotherm (VAPO), Walt Disney (DIS), Western Union (WU), Zogenix (ZGNS)

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QQQ’s Could Be Peaking…

The Invesco QQQ Trust (QQQ) had its 4-session winning streak snapped following the pullback to $205. Current and upper support at $205-$204.50 was triggered but held. A close below the latter would signal a possible near-term top with backtest potential towards $202.50-$202.

Resistance is at $205.50-$206. Continued closes above the latter and last Wednesday’s all-time high of $206.05 would be an ongoing bullish signal with upside potential towards $207-$207.50.

RSI has turned south on the close below upper support at 70-65. A close below the latter and the November low opens weakness towards the 60 level and late October support. Resistance is at 75.

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Monthly Lows in Focus on Yield Inversion Risk/ Profit Alert (T)

Monthly Lows in Focus on Yield Inversion Risk/ Profit Alert (T)

8:00am (EST)

The market reversed course on Wednesday after giving back the prior session gains as another sharp drop in yields sent investors back to the sidelines. Specifically, the 2-year and 10-year spread inverted for the first time since 2007 with inversions traditionally seen as indicators of impending recessions.

Although it can be debated if the U.S. is indeed headed for a near-term recession, or not, it is clear fears of a global slowdown are real. The headline news had a negative impact on the major indexes, either way, with prior support levels back in play. It is important to note, the market experienced this scenario a few months ago and bounced back after the 10-year yield fell below the 3-month yield.

The Russell 2000 dropped 2.9% after tapping a late day low of 1,465. Prior and upper support at 1,460-1,450 held with the late May and early June lows at 1,461 and 1,460, respectively.

The Nasdaq plummeted 3% following the midday backtest to 7,762 and close back below the 7,800 level. Current and upper support at 7,750-7,700 held with the monthly low at 7,662.

The S&P 500 sank 2.9% after trading to an intraday low of 2,841. The close below the 2,850 level reopens risk towards upper support at 2,825-2,800 and the 200-day moving average with last week’s low at 2,822.

The Dow stumbled 3.1% following the backtest to 25,521 while closing back below the 26,000 level. Upper support at 25,600-25,400 and the 200-day moving average was breached and failed to hold with the August low at 25,440.

There was no sector strength. Energy led sector laggards after sinking 3.9% while Financials and Communication Services skidded 3.7% and 3.6%, respectively.

Earnings for Tuesday 8-6-19

Before the open: Aircastle (AYR), Black Knight (BKI), Colfax (CFX), Dean Foods (DF), Discovery Communications (DISCA), Duke Energy (DUK), Energizer Holdings (ENR), GreenSky (GSKY), Henry Schein (HSIC), Intrepid Potash (IPI), Kamada (KMDA), LGI Homes (LGIH), Mosaic (MOS), Novanta (NOVT), Pitney Bowes (PBI), Ryman Hospitality Properties (RHP), SeaWorld Entertainment (SEAS), Shutterstock (SSTK), Tenneco (TEN), Unit (UNT), Vonage Holdings (VG), Welbilt (WBT), Zoetis (ZTS)

After the close: ADT (ADT), Beacon Roofing Supply (BECN), Cubic (CUB), Devon Energy (DVN), Extended Stay (STAY), Great Ajax (AJX), HCI Group (HCI), IntriCon (IIN), j2 Global Communications (JCOM), Key Tronic (KTCC), Lending Club (LC), Match Group (MTCH), Noodles & Company (NDLS), Papa John’s (PZZA), Red Rocks Resorts (RRR), Southwest Gas (SWX), Team (TISI), Vivus (VVUS), Weight Watchers International (WW), Zagg (ZAGG)