The S&P 500 fell slightly in volatile trading on Monday to start the holiday week as enthusiasm over a coronavirus stimulus deal was overwhelmed by worries over a viral new Covid strain in the U.K.

The broad equity index dipped 0.4%, or 14.49 points, to 3,694.92 after falling nearly 2% at its session low. 

Tesla dropped more than 6% as it entered the S&P 500 with a 1.69% weighting in the index, the fifth largest. The stock fell to its session following a report that Apple is moving forward with its plan to produce electric vehicles.

Now with a stimulus package agreed upon, investors may also be seeking to lock in profits after an unexpected banner year. With less than two trading weeks left in 2020, the S&P 500 is up 14.4% for the year.

“Covid mutations are a reality, and there is at least some disappointment around what’s actually in the stimulus deal, which means we may see this translate into volatility as we narrow in on the end of 2020,” said Chris Larkin, managing director of trading and investing product at E-Trade.
 

Plan A : Short if market failed to support above 3664. Targets are 3639, 3611 and 3585.

Plan B : Long only if market doesn't retrace much and supported firm above 3664. Targets are 3679, 3695 and 3713.

U.S. stock futures were lower early Tuesday morning after a volatile day on Wall Street that saw the Dow Jones Industrial Average erase a 400-point deficit.

The Nasdaq Composite fell 0.1%, or 13.12 points, to 12,742.52. The Nasdaq Composite has rallied 42.0% this year as investors favored high-growth technology companies.

During Monday’s regular market hours, stocks opened sharply lower amid concerns about a new variant of Covid-19 in the United Kingdom. Many European countries implemented travel restrictions on visitors from the U.K., and New York Gov. Andrew Cuomo called for the United States to take similar steps.

However, many experts, including those from the World Health Organization, said on Monday that the coronavirus vaccines from Pfizer and Moderna would likely be effective against the new variant and that Covid was mutating at a slower pace than the seasonal flu.

On the economic data front, investors will receive new readings on consumer confidence and existing home sales on Tuesday.
 

Plan A : Short if market failed to support above 12581. Targets are 12542, 12499 and 12458

Plan B : Long only if market doesn't retrace much and supported firm above 12581. Targets are 12610, 12645 and 12672.