The bulls evened the score on Tuesday as they were able to hold on for the win following a strong start. The indexes came off their highs as nervousness set in ahead of this morning’s key vote in Germany and the impending Fed news on QE3 but hit key milestones in the process.
The Dow jumped 69 points, or 0.5%, to end at 13,323. The blue-chips finally made a fresh 52-week and nearly 5-year high after kissing 13,354, up 100 points. The Dow cleared our 13,350 target once in the morning and again in the afternoon which opened the door for a pop to 13,500-13,600. Support is at 13,200 and then 13,000.
The S&P 500 gained 4 points, or 0.3%, to settle at 1,433. The index kissed 1,437.76 intraday but fell short of Monday’s 52-week peak of 1,438.74 despite pushing green all day. We have called for a run to 1,450 with the possibility of hitting 1,500 this month but a close below 1,400 would be bearish.
The Nasdaq edged high by a half-point, or 0.02%, to close at 3,104. Tech was in danger of ending in the red and below 3,100 but turned positive again late in the day to finish above support. The low for the day was 3,099 which occurred about 30 minutes before the closing bell. We still believe the bulls can trip 3,250 but a close below 3,100 and then 3,050 would signal the end of the recent uptrend.
The Russell 2000 added nearly 3 points to finish at 841.91 and is a six-pack away from a new 52-week party. The S&P Volatility Index ($VIX, 16.41, up 0.13) traded down to 15.46 before ending slightly higher.
Futures are showing a strong open after Germany’s Constitutional Court approved the European Stability Mechanism (ESM) which was a big relief for the bulls: Dow (+46); S&P 500 (+5); Nasdaq (+15).