MomentumOptionsTrading.com Morning Update for 7/15/2014
Bulls End Monday Skid
The bulls got off to a great start for the week as they ended their 3-straight Monday losing streak while pushing fresh highs. I mentioned the market had a good chance of ending higher on Monday and it was good to see the bulls follow through on their Friday win with the bears rolling over.
The Dow advanced 111 points, or 0.7%, to finish at 17,055. The blue-chips opened at 16,950 and made an immediate burst past 17,000 towards an all-time intraday high of 17,088. My near-term target of 17,200-17,300 from early June is back in play on the overshoot past 17,000. Support has been strong at 16,800.
The S&P 500 soared 9 points, or 0.5%, to settle at 1,977. The index opened just below 1,970 and reached a peak of 1,979.85 while holding 1,975 into the close. All good signs. A close above 1,980 gets the all-time high of 1,985 back on the bulls radar and a possible run at 2,000. The bears will be trying to get back below 1,970-1,960 again.
The Nasdaq jumped 25 points, or 0.6%, to end at 4,440. Tech cleared the 4,450 level after touching 4,451 and needs to hold this level if it wants to push 4,500 and the 52-week intraday high of 4,485.93. Support is at 4,400-4,375 on a pullback.
The Russell 2000 gained 5 points, or 0.5%, to finish at 1,165. The small-caps made an opening dash towards 1,170 and reached a peak of 1,169.55 but were unable to clear this level by the close. I have talked the urgency the bulls needed to show to clear 1,170-1,175 to start the week and while disappointing, they came close. However, another trip back below 1,160 would be bearish.
The S&P 500 Volatility Index ($VIX, 11.82, down 0.26) traded under 11.50 to 11.40 on the opening barrage but the bulls failed to hold this level. If the bears trigger 12.50-13.50 again this week, things could get nasty.
The flood of earnings have started as there are a bevy of companies reporting ahead of this morning’s open. I will try to cover some of the results in the midday update but for now, let’s go check on the current trades.
Heading from desk to press, futures look like this: Dow (+16); S&P 500 (+2); Nasdaq 100 (+5).