9:05am (EST)
The bulls scored another victory over the bears on Tuesday for their second straight win in a choppy session well defined by Europe’s woes. As 2Q earnings season winds down, corporate news is starting to slow as we look ahead to 3Q earnings. Over the next few weeks, there could be some companies warning Wall Street of lowered expectations for the upcoming quarter but most of the heavy-weights are in silent mood until the start of the cycle again in October.
This leaves economic news and global news to trade off of which can lead to choppy sessions. Ones like yesterday.
The Dow added 44 points, or 0.4%, to finish at 11,105. The index traded to a low of 10,987 at the open but rebounded intraday to trade to a high of 11,140. We mentioned the 11,200 area would be the next hurdle for the bulls, followed by 11,350-11,400. The bears are still targeting a drop to 11,000 then 10,800 by week’s end.
The S&P 500 popped 10 points, or 0.9%, to settle at 1,173 and above its 20-day moving average (see chart). The index held 1,150 after trading to a low of 1,157 at the start and traded to a high of 1,176. We were looking for a close above 1,175 but it was close enough to back up yesterday’s belief the market was going higher this week. Next stop 1,200 with a shot at 1,225 over the near-term.
The Nasdaq turned in a powerful performance, rising 37 points, or 1.5%, to end at 2,532. We said to look for a break above 2,500 this week and Tech was able to reclaim this level with ease. We also mentioned the next test would come in at 2,525-2,550 and the index managed to trade up to 2,537. More importantly, the Nasdaq also finished above its 10-day and 20-day moving averages.
The S&P Volatility Index (^VIX, 36.91, down 1.68) traded to a high of 39.43 but managed to stay under 40 which is a key level we are watching. The bulls are still making a push to get the VIX back under 30, and yesterday was a step in the right direction. We still need to be cautious but the bulls are building some nice momentum as they try to reclaim the top of the current trading range.
Futures are pointing towards a slightly higher open. Dow futures are higher by 42 points to 11,063 while the S&P 500 futures are up 6 points to 1,171. Nasdaq 100 futures are higher by a dozen points to 2,227. Subscribers, check the Members Area for the updates.
]]>