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9:00am (EST)
The bulls kept the bears at bay on Wednesday as the market once again pushed its way toward key resistance levels. Futures were already pointing towards a higher open and those gains held for much of the day despite some discouraging news from the Fed’s Beige Book and the Consumer Credit report.
The Federal Reserve’s latest economic report for August showed 5 out of the 12 regions experienced slower economic expansion for the month compared with just 2 regions in July. The news was released just ahead of President Obama’s proposal on tax reform and business initiatives. Meanwhile, Consumer Credit fell $3.8 billion which was the sixth straight month credit has tightened.
This caused a little nervousness in the final hours of trading but the bulls managed to take the market higher while the bears kept the major indexes below resistance levels.
The Dow traded to a high of 10,426 before settling with a gain of 46 points, or 0.5%, to 10,387. Boeing (BA, $64.50, up $1.08) and Caterpillar (CAT, $70.74, up $1.04) led the Dow’s charge but the bears managed to keep the action under 10,400 by the close.
The S&P 500 added 7 points, or 0.6%, and finished at 1,098. The index traded to a high of 1,103 which is right at the 50-day moving average but closed below the psychological 1,100 level.
The Nasdaq popped 20 points, 0.9%, and closed at 2,228. Resistance remains at the 2,250 level as the index traded to a high of 2,237.
Folks, we know it has been a tough environment to trade and the current range has been frustrating for a lot of investors. However, we have witnessed every bull and bear market over the last 20 years and usually when a stock or the overall market has stayed in this tight of a trading range, there is a huge breakout or breakdown.
As much as we believe the bulls could break through resistance, something feels funny with the market and crazy things happen on low volume days. Gold continues to blaze a trail higher and is over $1,250 an ounce while silver broke through $20 an ounce yesterday. The next big catalysts that will move the market will be the upcoming earnings announcements in October and the November elections. Until then, the market could continue to trade in this tight trading range.
Futures are showing a higher open this morning as new claims for unemployment benefits fell last week by a seasonally adjusted 27,000 to 451,000. Wall Street had expected a much smaller decline of just 2,000.
As a result, the Dow futures are higher by56 points to 10,448 while the S&P 500 futures are showing an 8 point pop to 1,107. The Nasdaq 100 futures are up by 13 points to 1,891. Subscribers, check the Members Area for the updates.
