Bears Push Support, Bulls Battle Back

1:05pm (EST)

The bears got an early jump at the open and tested support but the bulls have managed to hold and are pushing back. We mentioned Cisco System’s (CSCO, $16.95, down $0.84) earnings this morning but Tech has held up well despite Cisco’s 5% drop. Economic news has been disappointing and the Financial sector continues to die a death by a thousand cuts.

Before the bell, Wall Street learned the Producer Price Index (PPI) for April increased 0.8%, which was greater than the 0.5% increase that has been penciled in. Core PPI rose 0.3% in April, versus expectations for a 0.2% pop.

Elsewhere, Retail Sales were higher by 0.5% for April but came up short as expectations were pegged for a 0.6% increase. The silver lining was that retail sales, less auto sales, actually came in better-than-expected at 0.6%, which was greater than the 0.5% rise that has been expected.

And finally, Initial Claims were 434,000 for the week, which was higher than the 423,000 that had been forecast. The latest count is down from last week’s upwardly revised total of 478,000.

The Dow traded to a low of 12,537 but has held our 12,500 downside target. The blue-chips are currently up 5 points to 12,635 and is breaking out to new highs. The S&P is up a point to 1,342 while the Nasdaq is up 6 points to 2,851. Both indexes have also held our downside targets of 1,325 and 2,800, respectively.

Goldman Sachs (GS, $140.74, down $7.14) is down 5%, following an analyst downgrade from “Hold” to “Sell” and broke major support at $145. From the chart, you can see there is downside risk to $135 which is probably where they fall into a trading range. Shares have traded to a low of $140.66 after falling through the first wave of support at $145 which was prior resistance. The next test could come in at $135 if the $140 level is violated.

We have a lot to cover in our Members Area and we have been expecting somewhat of a bounce in the afternoon session which may or may not hold. We think it will as we have a NEW TRADE!

Subscribers, check the Members Area for the new recommendation and for our current updates.

We will be back in the morning with our next market update.

]]>

Comments are closed.

CFTC Disclosure:

GOVERNMENT REGULATIONS REQUIRE DISCLOSURE OF THE FACT THAT WHILE THESE METHODS MAY HAVE WORKED IN THE PAST, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. WHILE THERE IS A POTENTIAL FOR PROFITS THERE IS ALSO A RISK OF LOSS. A LOSS INCURRED IN CONNECTION WITH Momentum Options Trading, LLC CAN BE SIGNIFICANT. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CIRCUMSTANCE. THERE IS SUBSTANTIAL RISK IN TRADING. A LOSS INCURRED IN CONNECTION WITH FUTURES TRADING CAN BE SIGNIFICANT. WE MAKE NO CLAIM REGARDING PAST OR FUTURE PERFORMANCE. WE MERELY TRACK EVERY TRADE AND SHOW THE PERFORMANCE OF ALL TRADES THE SYSTEM OR NEWSLETTER PRODUCES. SIMULATED TRADING IS DIFFERENT THAN TRADING REAL MONEY. HYPOTHETICAL RESULTS ARE NOT REAL RESULTS. PLEASE CONTACT YOUR BROKER ABOUT THE RISK OR TRADING STOCKS, OPTIONS OR FUTURES. ALL COMMUNICATIONS ARE OPINIONS NOT ADVICE.

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

Blog

Bears Push Support, Bulls Battle Back

CFTC Disclosure: