Bulls Take a Breather
The Bernanke bounce ran out of steam as the bulls took a break following the surge to new all-time highs. They still pushed high and threw the bears a bone and today will be interesting as September options expire. The bulls will be looking to hold support that served as prior resistance while the bears plan for an ambush at some point.
The Dow dropped 40 points, or 0.3%, to close at 15,636. The blue-chips made a run to 15,695 but failed to clear Wednesday's peak of 15,709. The low checked-in at 15,625 and support is at 15,600 and then 15,400. The index is a little over 2% from our yearend target of 16,000.
The S&P 500 slipped 4 points, or 0.2%, to end at 1,722. The index triggered a new all-time high of 1,729.86 before kissing 1,720. The close below 1,720 keeps 1,700 in the picture but the bulls are looking at making a run to 1,750-1,775 on continued strength.
The Nasdaq added 5 points, or 0.2% to finish at 3,789. Tech came within 2 points of clearing our 3,800 target we set in early February and we can honestly say not many Wall Street pros thought we would be here - except us. We never raise our targets once we set them put it's not hard to imagine the Nasdaq hitting 4,000 at some point this year. However, first things first, and this is where we would expect a pullback but let's see what this weekend's chart work takes us. Near-term support is at 3,750. If 3,800 is cleared, a run to 3,850 could come on continued momentum.
The Russell 2000 dipped 2 points, or 0.2%, to close at 1,075. The small-caps missed surpassing their all-time high of 1,080 by a point before testing 1,072. There is still risk down to 1,050 but if 1,075 holds today a run to 1,100 could come by month's end.
The S&P 500 Volatility Index ($VIX, $13.16, down $0.43) fell 4% and finished below our 13.50 target. Next up is 11 as long as 15 sticks.
Ahead of the bell, futures are mixed: Dow (-20); S&P 500 (-2); Nasdaq 100 (+2).