We mentioned the Fiscal Cliff progress yesterday and we will keep the political rhetoric to a minimum as the zombies are still talking but significant progress is taking shape (or so they say) and the market loved it.
We try to trust the charts more than the headlines because it can blur your trading vision but news causes movement and volatility and that make traders nervous. The slick-talking pros and the talking heads are bullish or bearish on any given day but by sticking to the charts, it can soothe nerves and block out the noise.
Of course, there always has to be a Plan B if Plan A goes wrong but so far so good as the bulls got off to a good start for the week.
The Dow surged 100 points, or 0.8%, to end at 13,235. The blue-chips went out near their peak and easily closed above 13,200. This area will once again try to serve as short-term support with resistance at 13,350.
The S&P 500 added 17 points, or 1.2%, to finish at 1.430. The index closed back above prior resistance at 1,425 that will now try to serve as support. The move back above the 50-day and 100-day MA’s (moving average) was good to see.
The Nasdaq rocketed nearly 40 points higher, or 1.3%, to settle at 3.010. Tech cleared 3,000 with ease and will face its next test at 3,025. We have talked a lot about this level holding into the close after last week’s push to 3,035 but there has been no cigar, yet. The Nasdaq tested this level 3 times last week but the best close was 3,022. A strong close and a half-percent pop will get the bulls in line for a run to 3,050-3,100 this week.
A number of our options trades did rather well yesterday and are showing nice gains following yesterday’s pop past resistance. We have upped our Stop Targets on a few positions and have made them Hard Stops just in case the zombies are crying “wolf” gain. We will continue to ride them higher if the bulls can keep the momentum but we know not to trust politicians on anything.
Futures are showing a slightly higher open this morning. Dow futures are up 25 points to 13,209 while the S&P 500 futures are higher by 3 points to 1,430. The Nasdaq 100 futures are up 15 points to 2,677.
Subscribers, check the Members Area for the updates and stay on the lookout this morning for possible action.