9:00am (EST)
What’s that old saying? It’s not how you start the race, it’s how you finish.
The bulls started Tuesday’s trading session off on a slow pace, falling behind early, before making a steady run higher throughout the day. Economic news was light but buyers came in as the market continues to climb towards our near-term targets.
We talked about China’s rate hike yesterday, which caused a little pressure at the open as some on Wall Street worried higher rates on the Yuan would curtail the country’s ability to help drive a global economic recovery. However, despite the Debbie Downers, the bulls were able to push the indexes to fresh highs and at their best levels of the year.
The Dow gained 71 points, or 0.6%, to finish at 12,233. The index traded to a high of 12,238 and our near-term target is Dow 12,300-12,350. We are still expecting to trade up into this range by Friday and we have been talking about these levels since the beginning of the year. We have held to our guns while some have jumped off the bull bandwagon but next week is where it gets dicey. More on this in a minute…
The S&P 500 chipped-in with a gain of 5 points, or 0.4%, and ended at 1,324. The index reached 1324.87 and came thisclose to taking out our 1,325 target. We have said there is a chance of a run up to 1,350 but that depends on next week.
The Nasdaq popped 13 points, or 0.5%, and settled at 2,797. Tech went out at its high for the day and we have been circling 2,850 on the charts with a run to 3,000, possibly.
We will talk more about next week in our afternoon update, maybe, or by the end of the week, but we are trying not to think about it until our price targets are hit. Call us Stevie Wonder but we have our trading superstitions.
Our road map has guided us to 11 out of 12 winning options trades for 2011 but we know sooner or later the trend will change and we will have to adjust our trading plan, accordingly. Yes, we are likely to lose some soldiers if there is a trend change but we have been locking in half-profits on some trades that have done super well while trying to play options on stocks that will go up no matter what happens to the market. We have also used some longer-term trades which will help with volatility.
The turmoil in Egypt has led to some ground swelling as more protestors have hit the streets. Geopolitical concerns are also always a concern to the market and this one is no different. There is a little nervousness this morning as far as the futures as they are taking a slight hit.
Before the bell, Dow futures are off by 12 points while the S&P 500 futures are down by 4 points. The Nasdaq 100 futures are lower by 6 points. Futures are off their lows so that is a good sign. Also, there have been some solid Dow earnings reports that have come in this morning which could provide support so let’s see how things shake out but we are expecting to end the week with a bang.
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