12:30pm (EST)

The market is pulling back following Tuesday’s blast to all-time highs as the bears look to break support that had served as prior resistance.  The bulls were hoping for better economic news this morning but a couple of reports have worried Wall Street as we head into the second half of trading.

The ADT Employment Report came in at 158,000 and just below our low-end estimate of 160,000-180,000.  We thought it was a perfect number for the bulls but the ISM number also came in below par at 54.4.  The suit-and-ties were looking for a print of 56.

The bigger picture on the unemployment numbers will come on Friday with the Nonfarm Payroll numbers.

Despite the negative bias, the market is holding up well as the indexes are still making higher highs and higher lows.  The baby steps higher along with the slight pullbacks have created a mini trading range in recent weeks and are incredibly hard to trade.  This has caused some frustration for a lot of investors as many don’t want to miss another breakout while at the same time they don’t want to be part of a nasty pullback that everyone has been calling for.

This type of sentiment usually causes higher melt ups and there should be some major movement in the indexes over the next few weeks as first-quarter earnings season kicks off next week.  Companies will have to come in above the bar and outlooks will need to be rosy in order for the market to continue its ride higher.  Otherwise, the higher valuations may not be justified and could lead to a pullback if companies come in below the belt.

The Dow is currently down 65 points to 14,596 while the S&P 500 is lower by 11 points to 1,559.  The Nasdaq is off 19 points to 3,235.

The levels that the bulls need to hold are Dow 14,600; S&P 1,560; Nasdaq 3,250, or at least 3,240.

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