It was weird watching the Congressional elections last night because instead of watching bulls and bears, we were following Republicans and Democrats square-off in the ring. Wall Street took a back seat after the market closed on Tuesday to the battle for Capital Hill and things lasted into the night before all the votes were tallied.
Yesterday’s action went just as planned with the major indexes testing the top of the April highs but failing to close above these levels. After a positive open, the bulls never gave up ground as the market stayed above sea level for the entire session. The bears never mounted a threat so they have either hibernated or they are circling the wagons.
The Dow gained 65 points, or 0.6%, and closed at 11,188. The index traded above our 11,200 target once again to a high of 11,205 but we expected a close below our target and we liked the action yesterday.
The S&P 500 added 9 points, or 0.8%, to finish at 1,193 after kissing 1,195. We have been targeting a break above 1,200 for the index but we know the waiting is the hardest part.
The Nasdaq advanced 28 points, or 1.1%, and settled at 2,533 and was within spitting distance of setting a new 52-week high.
We have said the market is at a crucial point and for the past two weeks the bulls have tested the tippy-top of current resistance 4 times without a breakout. We also said this could play out into next week so nothing has really been settled yet. The Republicans took over control of the House of Representatives and added Senate seats.
Later today, we hear from the Fed which is expected to pump billions into the economy by buying treasury bonds. Trading will likely be flat into the afternoon which is when we expect to see the action heat up.
We have a lot to cover in our Members Area so let’s get on it. As we head to press, Dow futures are up 14 points to 11,166 while the S&P 500 futures are higher by 2 points to 1,195. The Nasdaq futures are showing a gain of 3 points and are at 2,153.