8:50am (EST)
The bulls got off to a good start yesterday as they were looking to extend their momentum from Wednesday’s session. The major indexes opened with gains of 1% after reports surfaced that Greece may abandon its eurozone bailout plan referendum which looked like a lock when the overseas markets started trading. However, Greece had its hand forced after hearing the European Central Bank (ECB) cut its lending rate by 25 basis points to 1.25% to become more accommodative to the current conditions.
The Dow surged 208 points, or 1.8%, to settle at 12,044. The close above 12,000 and the 200-day moving average (MA) was a good sign for the bulls as they look to tackle 12,200 next. If the 12,000 level is taken out today, support has been solid at 11,800.
The S&P 500 added 23 points, or 1.9%, to finish at 1,261. We were looking for a close above 1,250 and the next level of resistance will come in at 1,275 and the 200-day MA. With yesterday’s gains, the index is now in positive territory for the year.
The Nasdaq jumped 58 points, or 2.2%, and ended the session at 2,698. Tech traded to a high of 2,699.84 and we were cheering for a close above 2,700 into the close. Although they came up just short, the bulls did conquer the 200-day MA and will try to push 2,750-2,800 today or next week. Support is strong at 2,600.
The S&P 500 Volatility 500 Index (^VIX, 30.50, down 2.24) nearly finished below 30 but was unable to hit the 20’s despite a strong day. We have been mentioning we expect the VIX to hit 22 on the next leg up so stay tuned. Remember, the VIX works opposite the market for you newbie’s.
The bulls have some work to do if they want to extend their winning streak to 5-straight weeks as the bears hold a slight edge heading into today’s session. As we head to press, Dow futures are down 11 points to 11,965 while the S&P 500 futures are off by 2 points to 1,253. The Nasdaq 100 futures are slipping 9 points to 2,352.
Subscribers, check the Members Area for the updates and pay close attention to the Watch List. There are 2 possible new trades we are eyeballing this morning.
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