MomentumOptionsTrading.com Morning Update for 7/3/2013
Another Late Day Pullback
The market experienced another late day pullback on Tuesday but unlike Monday, the bulls failed to hold their gains. The bears didn’t do too much damage but the blue-chips made another triple-digit move from high to low despite more encouraging economic news. Auto sales zoomed to their hghest level in 5 years and Factory Orders came in ahead of expectations.
One of the Fed Heads that didn’t get in his 15 minutes of fame last week along with the other half dozen zombies, decided to repeat much of the talk on how the market overreacted to Ben Bernake’s comments on winding down the printing presses. Uh, we mean bond pirchases. This worked well last week but the NY Fed President ruined the rally instead of extending it according to the talking heads.
While headlines play an important role in market direction, on a technical basis, we said there could be flat action through Wednesday as the indexes churn in their current trading ranges.
The Dow fell 42 points, or 0.3%, to close at 14,932. The S&P 500 slipped a point, or 0.1%, to settle at 1,614. The Nasdaq also dipped a point to end at 3,433 while the Russell 2000 gave back a third of a point and finished at 989. All near-term resistance and support levels held.
The S&P 500 Volatility Index ($VIX, 16.44, up 0.07) traded down to 15.88 on the push higher at the start of trading but triggered a high of 16.93 on the late day pullback.
We will be watching the market until it closes today but we will be skipping our Midday Update as we wait for Friday’s Nonfarm Payroll report. Wall Street will be a ghost town at 1pm but there could be some early fireworks as traders take positions. The market is closed on Thursday.
We have updated all of our current trades and we have listed exit targets on a few of them that got nice pops yesterday. If we do take action in today’s half session, we will send out a Profit Alert and/ or possibly, a New Trade Alert.