The bulls made it 4 in-a-row on Thursday by ending June with a bang and their drive for five is looking pretty good as futures are up this morning. Yesterday’s gains were a combination of positive Greece news, window dressing, and a continued bounce off the 200-day moving averages. Throw in the fact that the bulls have been abused for 7 out-of-the-last 8 weeks made it an almost given we were due for a relief rally.
The Dow jumped 153 points, or 1.3%, and finished at 12,414. The index easily topped our 12,350 target with a little fluff and will now shoot for 12,600 before the 3-day weekend. Support comes in at 12,350 and 12,200 should the bulls fade.
The S&P added 13 points, or 1%, and settled at 1,320. We said to look for a run up to 1,325 once the index broke 1,300 and it kissed 1,322 yesterday. Next up is the 1,334 area and then a possible test up to 1,350. Downside help is at 1,300 then 1,275.
The Nasdaq advanced 33 points, or 1.2%, and closed at 2,773. Tech also took out our 2,750 target and is only 1% away from testing the 2,800 level. From there, look for 2,900 to come into a play and if that were to happen the bulls could easily push 3,000. Support comes in at 2,750-2,725.
We mentioned yesterday the market was on pace for a 4% gain for the week but the indexes still ended the quarter slightly lower. The key point we want to make here is that while we have enjoyed the rally, and June was super good to our subscribers, we still have to remain somewhat cautious until the market actually breaks to new highs. Otherwise, we could just be headed to the top of the trading range we have been in since February so it’s important to remember this.
We will talk more about this in our afternoon update but let’s enjoy the gains for now and continue to play what the market is giving us. There are a number of economic reports due out this morning, starting with the final Michigan Consumer Sentiment index and the ISM Manufacturing Index which are due out shortly after the open (10am). If that weren’t enough, May’s Construction Spending report will also be announced. An hour before the closing bell, the market will get a briefing on Auto and Truck sales for June.
We have included a number of new possible trades on our Watch List as we closed out 2 more winning trades yesterday which cleared some room in our portfolio. We may wait until next week to initiate new positions but there are a couple plays that we really like so we may add them today if there is a pullback. We also have some action items we may need to take care of for our Weekly Wrap portfolio so stay lock-and-loaded for those Trade Alerts as well.
Also, watch Dendreon (DNDN, $39.44, down $1.06) today and this month. Shares were back above $40 last night in after-hours after Medicare said it would pick up the tab for the company’s cancer drug, Provenge, which cost $93,000 to complete a treatment. Dendreon also got the okay from the FDA to run a plant in L.A. which will help with increased production. There is a clearly a win-win for a stock that is within a stone’s throw of its 52-week high of $44.
Dendreon has been in a year-long trading range and a break above $44 could lead to blue skies and a share price north of $50.
Futures are up as we head to press. Dow futures +21; S&P 500 futures +1; Nasdaq futures +2. Subscribers, check for the current updates inside the Members Area.