9:00am (EST)
If the volatility in July gave you heartburn then take another shot as things could get even crazier in August.
The ups and downs of the recent indexes have caused some upset stomachs and yesterday’s nearly 300-point swing had Wall Street traders ordering doubles.
We mentioned yesterday morning we were prepared for a test down to the 200-day moving averages once we saw futures falling from their highs on Sunday night and into Monday morning.
The initial pop that was expected at the open was faded like a Tiger Woods tee shot after the market got the worst ISM reading in nearly two years. Of course, we are half-full thinkers and we mentioned a reading over 50 was “positive” in our books. Didn’t matter. The bulls folded like a cheap lawn chair after pushing the indexes higher by 1%.
The bears, meanwhile, were able to run the market to session lows by lunchtime as they, too, were up 1% heading into the second half of trading.
Everyone was on pins and needles as America’s fate was tied to a crucial vote on Capitol Hill that continued to be delayed as the jockeying for more political votes swayed the market. However, as the game of chicken got near the close, both the bulls and bears backed off as the market finished basically flat.
The Dow slipped 10 points to finish at 12,132. The index fell just short of our resistance target of 12,350 after trading to a high of 12,282 at the open. The blue-chips kissed a low of 11,998, and we mentioned 12K could come into play, but it was nice to see the bulls hold support and then some.
The S&P 500 fell 5 points to settle at 1,286. The index mirrored the Dow’s moves and traded up to 1,307 and to a low of 1,274. We outlined 1,300 and 1,275 as tops and bottoms heading into Monday but we certainly didn’t expect to see both hit in the same day. The S&P was also able to hold its 200-day moving average (MA) as well.
The Nasdaq gave back 11 points and closed at 2,744. Tech traded to a high of 2,796 but we were looking for a print of 2,800+ at the open which represents short-term resistance. The index has been the strongest of the three and tested its 200-day MA at 2,700 by trading to a low of 2,716. The one troublesome sign is that the Nasdaq is dancing right on its 50-day MA so we will need a close above 2,750-2,775 today as a sign the bulls are serious at making a run to new highs in August. Same for the Dow and S&P.
There seems to be a little momentum ahead of the bell following last night’s approval of the debt-deal. For the scorekeepers at home, the final tally on the vote was 269-161. We do have to say though, despite all the bickering in D.C., it was sweet as cherry pie to see Gabrielle Giffords make an appearance. It was the congress woman’s first appearance at the White House since being shot six months earlier in Arizona as she voted in favor of the bill.
As we head to press, Dow futures are down 42 points to 11,998 while the S&P futures are lower by 6 points to 1,274. Nasdaq futures are off by 10 points to 2,337. The key for this morning will be if the market gets a bounce off the 200-day MA’s shortly after the open.
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