MomentumOptionsTrading.com Midday Update for 12/4/2013
VIX Clears 15, Watch the Close
The bears are making another push at the second layers of support and are dancing with the Dow and S&P’s 20-day MA’s again following mixed economic data. The bulls made a run at resistance that served as prior support after the open but had trouble holding their gains as we head into the final hours of trading.
New Home Sales came in ahead of estimates for October at 444,000 versus 425,000 but were modestly disappointing after revisions to prior months. The ISM Services index slipped 1.5 points to 53.9 for November after rising a point to 55.4 in October.
The ADP Employment Report showed 215,000 private jobs were added in November versus a forecast for 185,000. This was “good” news but worries about Fed tapering immediately made the rounds.
We were expecting a flat session for today and tomorrow ahead of Friday’s Nonfarm Payrolls report but we have been warning about the recent afternoon pullbacks. If the bears’ attack gets worse today into the close, it will be crucial the bulls hold the next layers of support. If there is a bounce into the close and the market finishes flat or higher, it could be a good sign for Friday.
The Dow is currently lower by 88 points to 15,827 while the S&P 500 is off 12 points to 1,782. The Nasdaq is declining 24 points to 4,012 and the small-caps are at 1,116 – down 7 points. More importantly, the S&P 500 Volatility Index ($VIX, 15.39, up 0.84) is up nearly 6% and could close above 15.
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