Dow, S&P Breakout, Small-Caps Trigger 1,050
The market can be frustrating at times as we wait for the gyrations in the market to play out and following an incredible volatile June, a surge off the lows in July and then 4 days of flat action, Thursday's push to new all-times is a great reminder on why we play the options game. As Ice Cube would say, it was a good day.
We have been calling for a run to new highs and for the subscribers that read every email, and study every chart, and follow all of our clues, then you have enjoyed a nice ride with us over the past few months. Of course, we have no time to rest on our laurels as we have a ton of action to talk about. Like a kid at Christmas, we can't wait for this morning's opening bell.
The Dow jumped 78 points, or 0.5%, to close at 15,548. We said a close above 15,500 would be bullish and that it could lead to a run to 15,800 on a close above 15,600. Yesterday's high was 15,589. We would like to see the bulls hold 15,500 on any weakness today but there is risk down to 15,400-15,350 if they can't hold the momentum.
The S&P 500 added 8 points, or 0.5%, to settle at 1,689. The index traded to a high of 1,693 and we mentioned a break above 1,685 could trigger 1,700. The S&P reached a peak of 1,693 and the aforementioned support and resistance levels could be bullish (1,700) or bearish (1,685) on a close above or below these levels for next week.
The Nasdaq gained a point, or 0.04%, to end at 3,611. Tech kissed a 13-year peak of 3,624.54 and we have said there is a chance 3,650 comes into play if the bulls hold 3,600. They have for 2 days but today will be challenging considering the high-profile earnings misses after yesterday's close. A finish above 3,625 could lead to our fluff target next week but a drop below 3,600 could be cause for concern.
The Russell 2000 closed right on our bulls-eye target of 1,050 after the index advanced another 8 points, or 0.7%. The small-caps triggered 1,052.46 and could push 1,075-1,080 on continued momentum but we do expect a pause here soon. The key level of support to watch for on a dip is 1,036 and the bulls have over 1% to play with.
The S&P 500 Volatility Index ($VIX, 13.77, down 0.01) was flat as a pancake but did drop below 13.50 to a low of 13.20. We have said there is a chance the bulls push 12.50 but the bears are still trying to get back above 15 and still need to be respected.
As we head to press, here is how futures look: Dow (-19); S&P 500 (-1); Nasdaq 100 -100 (-1).
We have some good news this morning on our earnings trade from Wednesday, and hopefully, we can get a 150+% return on this morning's open. Subscribers, check the Members Area for the updates and stay locked-and-loaded in case we take additional action this morning.
Side Note: Detroit files for Chapter 9 bankruptcy - the biggest bankruptcy filing in U.S. municipality history. This city is $20 billion in the hole and this could have a ripple effect in the muni bond market.