MomentumOptionsTrading.com Morning Update for 6/11/2014
Bears Split Tuesday Win as Bulls Rebound
The bears made an opening stand on Tuesday’s open and held negative territory throughout the day but the damage was minimal. The bulls easily held fresh support as the market stayed in a tight trading range into the closing bell before a final push got them a split.
The Dow gained 3 points , or 0.02%, to close at 16,945. The blue-chips traded down to 16,897 while holding support at 16,900-16,800. The bulls are still eyeing a run past 17,000 as they pushed 16,946 into the closing bell.
The S&P 500 slipped a half-point, or 0.02%, to settle at 1,950.79. The index tested a low of 1,944 and held the 1,950 level. There is risk to 1,940 on a continued back test but the bulls are eyeing resistance and continued fluff at 1,975-2,000.
The Nasdaq gained 2 points, or 0.04%, to end at 4,338. Tech managed to trade into positive territory and up to 4,338 within the first few minutes before falling to 4,319 within the first half hour. The volatility eased as the bulls made another run at greener pastures and matched the early morning high.
The Russell 2000 dropped 3 points, or 0.3%, to close at 1,172. The small-caps struggled from start to finish after bottoming at 1,166. There was a slight recovery off the lows with support at 1,160-1,150 easily holding. The close back below 1,175 was disappointing but the bulls should recover and could still push 1,200 if they rebound today.
The S&P 500 Volatility Index ($VIX, 10.99, down 0.16) was flat as a pancake as it traded in a tight range of before falling 1.4%. I’ve mentioned the 11.50 and 12.50 levels as possible clues the bears are waking up. Although the first layer was tested by the bears, the bulls are still shooting for single-digits.
I have finished up research on a New Trade but it is rare I buy options at the open. I like to watch the action first, as the rookies trades and market scalpers do battle and then let the dust settle. If the technical picture remains the same for the trade into the midday update, I will likely issue the new trade as an official recommendation.
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