MomentumOptionsTrading.com Morning Update for 11/19/2013
Bears Get Mixed Monday Win
We had a feeling the market would pull back off its Monday highs as Wall Street decided to ring the register after the bulls cleared round number resistance. Of course, resistance is hard to define when dealing with possible market tops and with the herd calling for a pullback the selling pressure picked up steam into the close.
The pullback may have flushed out more of the weaker hands as the suit-and-ties continue to say here a bubble there a bubble with Carl Ichan the latest to join to the list.
The good news for the bulls is that the blue-chips showed some strength as the Dow ended in positive territory for the third-straight Monday. Although the other indexes finished lower, the 20-day MA's (moving averages) held and Tuesday's have been bullish of late.
The Dow gained 14 points, or 0.1%, to settle at 15,976. The blue-chips traded to a high of 16,030 on the open but faded to 15,942 (down 19 points) in the final hour of trading before bouncing back. Near-term support is at 15,800 followed by 15,600. A close above 16,000 could lead to a run to 16,250-16,300.
The S&P 500 slipped nearly 7 points, or 0.4%, to finish at 1,791. The index reached a peak of 1,802 before slipping to a low of 1,788. There is risk down to 1,765 and the 20-day MA on further weakness with 1,750 serving as backup. A close above 1,800 gets 1,825-1,850 in play.
The Nasdaq dropped 37 points, or 0.9%, to end at 3,949. Tech made a run at 4,000 after touching 3,994.97 but fell short of clearing this milestone for the first time since the turn of century. The low checked-in at 3,942 and the close below 3,950 was ugly. The bulls held 3,925 and the 20-day MA but a close below these levels would be bearish. A close above 4,000 could lead to 4,200 over the near-term.
The Russell 2000 declined 9 points, or 0.8%, to close at 1,107. The small-caps pushed 1,119.98 on the open but ended right at the 20-day MA after testing a low of 1,105. The bulls held 1,100 but we mentioned another close below this level could lead to a retest of 1,075. A pop past 1,120-1,125 would be bullish.
The S&P 500 Volatility Index ($VIX, 13.10, up 0.91) jumped 7% after topping at 13.22 but the bulls held 13.50. A close above this level and then 15 would be bearish while a close below 12.50 keeps the uptrend intact.
As we head to press, futures look like this: Dow (+6); S&P 500 (-3); Nasdaq 100 (+1).
We had some earnings news after the bell on Monday for one of our current recommendations for our Daily so let's go see where things are at inside the Members Area.