MomentumOptionsTrading.com Morning Update for 5/13/14
Bulls Push Record Highs
The bulls made a strong run at the open on Monday to push all-time highs and held a steady pace throughout the session to keep the bears at bay. The action was decisively bullish as there was no fade or pullback into the close and sets up well for today as Tuesday have been mostly bullish for much of the year.
The Dow jumped 112 points, or 0.7%, to end at 16,695. The blue-chips traded to an intraday high of 16,704.84 and are on track to trip 16,800-17,000 over the near-term following the close above 16,600. This level will now try to hold as support with 16,400 serving backup.
The S&P 500 surged 18 points, or 1%, to settle at 1,896. The index traded up to 1,897.13 and closed at an all-time high but fell short of its April 4th intraday all-time high of 1,897.28. Resistance remains at 1,900 and my 1,909 near-term fluff target from late February is almost here. Support remains at 1,875.
The Nasdaq ballooned 72 points, or 1.8%, to finish at 4,143. Tech easily cleared the 4,100 level on the open and made a run at 4,150 into close. A close above this level would be bullish but the bigger battle lies at 4,200. Prior resistance at 4,100-4,075 will now try to serve as near-term support.
The Russell 2000 rallied 26 points, or 2.4%, to close at 1,133. The small-caps opened at 1,111 and topped its 200-day MA at 1,115 shortly afterwards. The push past 1,125 was also bullish and sets up a possible run to 1,150 this week (or next) as long as this level holds. Monday’s high reached 1,136.95.
The S&P 500 Volatility Index ($VIX, 12.23, down 0.69) dropped 5% and closed below 12.50 after trading down to 11.88. The 52-week low of 11.69 triggered the day after Christmas. For the slick talking pros that have ignored the VIX all year, put that in your pipe and smoke it, as I have been preaching that the VIX still matters.
Futures are showing a green open at the start of trading: Dow (+13); S&P 500 (+1); Nasdaq 100 (+4).