MomentumOptionsTrading.com Morning Update for 6/9/2014
Bulls Push December Fluff Targets (Again)
The small-caps and Tech tested my December 2013 “fluff” targets in March and while it took another 3 months, the broader market triggered fresh all-time highs throughout the week.
The Dow zoomed 88 points, or 0.5%, to finish at session and an all-time of 16,924.28. The S&P 500 surged 9 points, or 0.5%, to match the blue-chips record as it ended at at all-time high of 1.949.44.
The Nasdaq zoomed 25 points, or 0.6%, to settle at 4,321 and traded to a high of 4,322. The 52- week high is at 4,371.71. The Russell 2000 roared 11 points, 1%, to close at 1,165. The small-caps kissed 1,167 and are just 1% away from clearing 1,175.
The S&P 500 Volatility Index ($VIX, 10.73, down 0.95) closed at session lows. The bulls ability to hold 12.50 throughout the week was another solid sign fresh highs in the market would come into play.
I reiterated Dow 16,800-17,000; S&P 1900-1,909 (specifically); Nasdaq 4,400-4,500; and Russell 1,200-1,225 in March. I have talked about the VIX hitting fresh 52-week lows and possibly single-digits all year long while the talking heads continue to get it wrong.
My yearend price targets from February for Dow 19,000; S&P 2,100; Nasdaq 4,800-5,000; and Russell 1,400 may have seemed unrealistic (again) as I said the Dow could move another 3,000 points this year. The suit-and-ties that said no way 1,900 would trigger in May for the S&P, they were wrong once again with talk of 2,000 now surfacing.
Last year, I showed chart work and said the Dow could move from 13,000 to 16,000 and subscribers were very surprised. Not after the money they made.
My price targets for 2014 are/ were the HIGHEST out of dozens of Wall Street firms that predicted the S&P would gain just 3%-5% this year.
My chart work is always done in February for yearend price targets, or “educated guesses”. New subscribers can check the 3/2/2014 Weekly Wrap and the 3/3/2014 Daily for all of the predictions and chart work.
The point I want to make is now that these fluff targets are triggering, the wall or worry becomes that much taller. All of a sudden, the famous pros that were cautious and said to sell everything are now bullish again.
The bears could have a long hungry summer or they get some action somewhere down the road.
I have much more to cover but I wanted to take the weekend to get more thoughts together and to enjoy last week’s action. The chart work from last week paid in spades and the real grind begins next week. For new subscribers, go to last Sunday/ Monday updates to see the channels the bulls cleared.
I predicted in late May there could be a rally through mid-June if there was a break out of the month long, incredibly tight trading range. I also mentioned the following week is option expiration week. The next round of earnings start in July.
The May action may have seemed boring but I often remind readers never short a dull market.
The current trades got some nice pops last week but naturally some of the put trades did not. A rising tide lifts all boats but they can serve as protection in case the waters get choppy later in the month.