MomentumOptionsTrading.com Morning Update for 7/2/2014
S&P Trips 1,975; Small-Caps 1,200; Still Waiting on Dow 17K
The bulls came within 2 points of triggering Dow 17,000 but the enthusiasm on Wall Street was a golf clap instead of a pep rally. I mentioned yesterday the suit-and-ties might have to wait for today or tomorrow to clear this hurdle but the other indexes continue to clear my December fluff targets.
The Dow jumped 129 points, or 0.8%, to finish at 16,956. The blue-chips pushed an all-time high of 16,998.70 and I mentioned another push above 16,900 should trigger 17,000. On 6/10/14, I said there could be a push to 17,250-17,300 on an overshoot. Support continues to be strong at 16,800.
The S&P 500 soared 13 points, or 0.7%, to settle at 1,973. The index traded to a high of 1,978.58 and just missed closing above the 1,975 level. This gets the upper-end of my fluff target of 2,000 in play over the near-term. Support will try to hold at 1,975-1,970 but there is backup at 1,960-1,950.
The Nasdaq zoomed 50 points, or 1.1%, to finish at 4,458. Tech easily cleared 4,450 after reaching a peak of 4,471.59 and held this level into the close. A run to 4,500 continues to be a reality and not a fantasy for the index. Fresh support at 4,400 will try to hold on a pullback and there is additional help at 4,350.
The Russell 2000 roared 13 points, or 1.1%, to end 1,206. The small-caps reached a peak of 1,213.55 before ending slightly off its high. The close back above 1,200 was bullish and if 1,210 clears on a close, a push to 1,225 is likely.
The Russell 2000, technically, set an all-time intraday high following the run past 1,200. The action from December was “cleared” by the big wigs in January so the “bar” doesn’t anymore but here were my thoughts:
December 23, 2013:
“The Russell 2000 opened at 1,212.81 and kissed 1,213.49 in the opening minutes before coming back down to earth. The 5% move could have been a rebalancing act and either marks the high for the year or is one hell of a clue this level will be triggered in January.” (End)
The S&P 500 Volatility Index ($VIX, 11.15, down 0.42) traded to a low of 10.92 and closed back below the 11.50 level. The bulls pushed a low of 10.92 and are back within striking distance of triggering single-digits. There is wiggle room to 12.50 if the bears reclaim 11.50 but any closes above 12.50 needs to be watched carefully.
The current trades continue to perform well but I may take profits in quarter or half positions ahead of the upcoming long weekend.
Ahead of the open, futures look like this: Dow (+13); S&P 500 (+2); Nasdaq 100 (+4).