9:00am (EST)
The bulls stretched the Dow’s winning streak on Tuesday’s to 19-straight as the blue-chips rebounded off their lows to push another all-time high. The come from behind victory extends a streak that has been active since mid-January and has accounted for nearly 70% of this year’s winnings for the index. The bulls will be going for 20 next week following a holiday Monday and volume could be weak as summer vacations begin to kick in.
The Dow added 52 points, or 0.3%, to close at 15,387 on Tuesday. The blue-chips traded in a 91-point range with the low checking-in at 15,326. The intraday high of 15,434 still keeps our 15,500-600 target in play as long as short-term support at 15,300 holds.
The S&P 500 advanced 3 points, or 0.2%, to settle at 1,669. The index traded down to 1,662 on the open but nearly cleared our 1,675 target after trading up to 1,674.93. A close above this level would trigger a possible run towards our year-end target of 1,700. Support has been strong at 1,650 since last week and we are still watching this level on a pullback.
The Nasdaq popped a 6-pack, or 0.2%, to finish at 3,502. Tech closed above our near-term target of 3,500 and kissed 3,512 while holding down resistance. The index could run to 3,600 before a pullback as we would be surprised to see our year-end target of 3,800 tested without one – but you never know. Support will now try to hold at 3,500 followed by 3,450.
The Russell 2000 added a point, or 0.1%, to close at 998.78. The small-caps tripped 1,000 again by a half-point but finished just below this level for the second straight session. Meanwhile, the S&P 500 Volatility Index ($VIX, 13.37, up 0.35) was up nearly 3% but stayed below 13.50 after testing 13.44.
As we head to press, futures are showing a slightly higher open: Dow (+21); S&P 500 (+3); Nasdaq 100 (+6). Subscribers, hit the Members Area for the latest updates.











Bulls Buck China Contraction/ New Trade!!!
Thursday, May 23rd, 2013
1:05pm (EST)
Much is being made of yesterday’s 1% pullback and last night’s news that China was contracting instead of expanding sent a shockwave to the overseas markets as China’s futures exchange was halted on the news. This led to a tanking U.S. futures market and a lower open on Wall Street but the bulls have battled back to nearly breakeven for the session.
We are somewhat surprised by the action as we thought a stronger test to support would come but we did feel like the indexes would hold. The first wave of support was expected as the 1% drop at the open was a given. The question would be if the second wave would be tested or if buyers would step in.
One index we have been harping on for clues of a continued rally or warnings of pullback is the S&P 500 Volatility Index ($VIX, 14.10, up 0.28). Besides our pinpoint accuracy targets for the indexes, the VIX has also given us great clues in forecasting the market’s action although the suit-and-ties continue to dismiss the index. We will have to see if today’s pop over 15 is a continued warning sign of the slight pullback everyone and their sister has been waiting for. If the VIX holds 15 and if the bulls can hold current levels; and end higher on Friday then there is a chance the indexes continue to set new highs into next week.
That is a lot if’s and’s and but’s for the bulls and the same case can be made for the bears as today’s attack has been wasted if the bulls can breakeven for today’s session. We are in a sweet spot as our portfolio is light and our current trades are on cheap options that stretch out into June and July.
We still have another week to go before May is over and we have mentioned we believe the current rally could extend into June before the bears make a serious attack. Today’s action has been scary for the talking heads but we have given you the clues to keep your emotions in check.
As we head to press, the Dow is up 4 points to 15,311 while the S&P 500 is off 5 points to 1,650. The Nasdaq is lower by 4 points to 3,459.
We have some more updates to go over with our current trades and we have a NEW TRADE so let’s go check the tape. Subscribers, hit the Members Area for the latest comments and action.
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