Morning Update for 7/2/2013 

Late Day Fade Stalls Rally


9:00am (EST)

The bulls started off the second half of the year with decent gains but the second half of Monday’s session and the final hour of trading favored the bears.  The indexes were able to make higher highs and were in the green from start to finish but the failure at resistance will continue to limit the upside until they are cleared on the close.

The Dow added 65 points, or 0.4%, to end at 14,974.  The blue-chips traded to a high of 15,083 but gave back triple-digits and the 15,000 level by the closing bell.  We have been mentioning the 15,200 level as a possible trigger to higher levels and we are watching for an early print of 15,112 for a clue.  This was the June 19 close before the 354 point drop to 14,758.  Support is at 14,800 and gives the bulls a little more than 1% to play with but another close below this level could cause them problems.I

The S&P 500 advanced 8 points, or 0,5%, to settle at 1,615.  The index traded to a peak of 1,626 but failed to hold 1,625.  The June 19 close was 1,628 before the dive to 1,588 so watch this level for a possible run to 1,650 again.  Another finish below 1,600 would set the tone for a test down to 1,575 (again).

The Nasdaq jumped 31 points, or 0.9%, and went out at 3,434.  Tech kissed 3,454 and cleared the 3,450 level on its run higher towards 3,500 but ended nears its low for the session.  The close above 3,425 was slightly positive but a close below 3,400 could be grizzly down to 3,350-3,300 again.  The June 19 close was 3,443.

The Russell 2000 surged 12 points, or 1.3%, to finish at 989.  The small-caps made a push to 993 and just missed holding 990.  The finish above the June 19 close of 986 was bullish but the Russell 2000 needs to clear and hold 1,000 before we see the next wave higher.  The bulls have a 2% cushion before 975 comes into play.

The S&P 500 Volatility Index ($VIX, 16.37, down 0.49) fell 3% after testing a low of 15.  The bulls are getting close to pushing 15, again, and continue to keep the action below 17.50.

Futures are showing another up open as we head to press.  Dow (+45); S&P 500 (+5); Nasdaq 100 (+12).  Subscribers, check the Members Area for the updates.