MomentumOptionsTrading.com Morning Update for 6/3/2014
Blue-Chips Up on a Mixed Monday
The bulls tried the get the entire herd into greener pastures by the close but some of the baby bulls got left behind.
The Dow added 26 points, or 0.2%, to end at 16,743. The blue-chips made a brief trip into negative territory to 16,682 shortly after the open but rebounded to hold 16,700 and positive territory throughout the day. The index reached an all-time intraday peak of 16,756.64 and remains on track to trigger 16,800-17,000.
The S&P 500 hopped over a point higher, or 0.1%, to settle at 1,924.97. The index touched a low of 1,915 and was choppy throughout the second half before gaining a little traction into the close. Support at 1,909 easily held and the intraday all-time high of 1,925.88 gets 1,950-1,960 in play.
The Nasdaq dipped 5 points, or 0.1%, to close at 4,237. Tech opened slightly higher and touched 4,247.96 but failed at clearing 4,250 for the second-straight session. The low of 4,207 held support at 4,200 but there is risk to 4,175-4,150 on a drop below this level.
The Russell 2000 slipped nearly a 6-pack, or 0.5%, to finish just below 1,129. The small-caps traded to a low of 1,121 and held the 200-day by a point. I mentioned 1,125-1,120 needs to be watched carefully this week and Monday’s hold was a good sign a run to 1,150 is possible over the near-term.
The S&P 500 Volatility Index ($VIX, 11.58, up 0.18). The close above 11.50 was slightly bearish but no bulls worries until 12.50-13.50 trips.
Much of Monday’s weakness can be attributed to Apple’s (AAPL, $628.65, down $4.35) “sell the news event”. As long as $600 holds as support, shares could trade to $675. This means on a 7-for-1 split shares could reach $96-$97. Yesterday, I mentioned shares could open below $90 next week if Friday’s close is below $625.
There could be an opportunity for an option trade next week. The options on a “700 strike” call option might be cheap enough for a near-term/ long-term play. More to come.
Heading from desk to press, futures look like this: Dow (-4); S&P 500 (-2); Nasdaq 100 (-2).
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