On banking holidays, such as Columbus Day, with fewer market participants, strange things can happen and Monday was no exception. When there are wide premarket ranges (35.75 handles), it is not common for the S&P 500 index to breach both ends of the premarket range and settle at one extreme. Once again, that is what happened in Monday’s session.
What started as potentially a bad day, turned into a good day and ended up being a horrible day. The reason being that it was horrible instead of just bad, was the index showed strong rejection of the top of last week’s range (4421.50 on Thursday) with a near-perfect double top on Friday (4407.75) and Monday (4407.50). The negative price action may lead to a test of last week’s low (4267.50), which coincides with the low of the recent move from its October 1 low (4260).
Many technicians stand by the saying, there is no such thing as triple bottom, that lower area stands as a quadruple bottom. Therefore, if revisited for the fifth time and breached, it would further weaken the case for a new all-time high by year-end.
The index futures ended the cash session lower by 31 handles at 4351.25.
Only one issue of the top components was in the green on Monday and that was Tesla Inc. (NASDAQ: TSLA), The issue was able to cross into the $800 handle for the second time in the last three sessions, but was unable to post a new closing high for the move ($793.61).
For the session, the issue added $6.45 or .08% to close at $791.94. That was much better than the cash index’s decline of 0.69%.
After its unusual rally from its September low to a new all-time high on Thursday ($150.49 to $171.51), investors were taking profits in one of the top components, JP Morgan Chase (NYSE: JPM). The company will report Q3 earnings before the open on Wednesday.
For the session, the issue declined $3.58 or 2.1% to close at $166.64.
PreMarket Prep Stock Of The Day: Southwest Airlines (NYSE: LUV)
For whatever the reason may be, the cancellation of 1800 flights over the weekend had investors heading to the exit. Read more about LUV here.