12:25pm (EST)

The bulls have pushed new high on the Dow and Nasdaq but are still having trouble with resistance with the S&P 500 and Russell 2000.  The market has pulled back off its highs and the action seems bullish ahead of today’s Fed speak.

Futures didn’t have a big reaction to the Q2 Gross Domestic Product (GDP) report and remained lower heading into the opening bell but the numbers were good as growth came in at 1.7%.  The suit-and-ties were looking for a GDP figure of 1%.  Elsewhere, the ADP Employment Change report said 200,000 jobs were added in June versus expectations for 180,000.

The Dow is up 63 points to 15,579 and has kissed 15,634 while the S&P 500 is higher by 7 points to 1,693.  The Nasdaq is advancing 19 points to 3,635 and the Russell 2000 is up 4 points to 1,047.

We will be watching the action for the rest of the day and while we do expect a little volatility in the afternoon, all signs are pointing towards another possible breakout.  The market is still in a trading range as the bulls need to clear and HOLD resistance before we see new all-time closing highs and a continued failure to do so would set up well for the bears heading into August.

We mentioned a few weeks ago we expected the market to continue its move higher throughout the month and July has been sweet.  We are still expecting a run to and past our yearend and fluff targets but August is typically a weak month for stocks as well as September so we would expect any gains to be minimal and not like the 5%-7% pops we have seen this month in the indexes.  Any pullback could be swift and violent but there is also the possibility of the trading range continuing.

We are sure the taper talk will heat up for the rest of the week as some of the talking heads are still calling for the Fed to cut back on its monetary policy in September.  Thursday’s and Friday’s unemployment figures will only add fuel to the fire but for now its good to see the market trying to break out of its trading range.

We have a lot to cover inside the Members Area so let’s get on it.  Also, stay lock-and-loaded in case we take action on our current trades or issue a New Trade Alert as there are a few plays we like from our Watch List.