MomentumOptionsTrading.com Morning Update for 5/9/14
Another Mixed Session
The bulls had a good thing going on Thursday before the bears showed up in the afternoon. The major indexes had cleared resistance but the action into the close left Wall Street once again scratching its head.
The Dow added 32 points, or 0.2%, to close at 16,550. The blue-chips traded to a high of 16,622 but failed to clear the April 4th high of 16,631. The bears pushed a low of 16,502 ahead of the bell but the bulls were able to hold the 16,500-16,600 zone after the smoke cleared.
The S&P 500 dipped 2 points, or 0.1%, to finish at 1,875. The index peaked at 1,889 into the afternoon before tumbling to 1,870 late in the day and holding 1,875.
The Nasdaq fell 16 points, or 0.4% to end at 4,051. Tech opened lower and tested shaky support at 4,050 before tap-dancing with the 4,100 level for much of the session. However, a late day fade to 4,039 nearly ruined the party and the bulls were fortunate enough to escape with a close above 4,050.
The Russell 2000 tanked 11 points, or 1% to settle at 1,097. The small-caps made a run past their 200-day MA (moving average) at 1,115 before breaking down like a rented mule. The low reached 1,095 and I have been saying this week the bulls had wiggle room down to 1,102 and then 1,095. Yesterday’s close below the 1,100 level and failed attempt to clear the 200-day MA is troubling and again, opens risk to 1,075-1,050 for today and into next week. The bulls could regain their lost momentum with a push past 1,100-1,110 into the weekend.
The S&P 500 Volatility Index ($VIX, 13.43, up 0.03) traded to a low of 12.92 but once again failed to get below 12.50. The high of 13.88 was well below the 15 level warning sign I have given.
The bulls missed a golden opportunity for a breakout after failing to clear and hold the upper levels of resistance yesterday. It’s been another week of sloppy, choppy trading and today’s close along with Monday’s finish will now be the focal points for trying to pick market direction. With the small-caps struggling, it could be now or never, to a degree, for the bulls to make a stand.