The Market opened weak but quickly turned positive within the first half hour of trading and maintained that strength into the close. The DJIA was up 43 points, the S&P500 up .5%, and the Nasdaq100 up .8%. The DJIA and Nasdaq100 closed at new highs, while the S&P500 closed just a point below its March 17 high. After one day of pulling back on Friday, the Market resumed its slow climb upwards. Volume reverted to being anemic again and refuses to confirm the strength of this rally. The major indices remain above their Jan. highs and overall technicals remain positive. The S&P500 and Nasdaq100 are trying to move up through the bottom trend line of their 10 month up sloping channel and may find some resistance here. The S&P500 and Nasdaq100 remain just above longer term congestion areas of 1150 and 1920, respectively, and will look for a catalyst to push into higher ground. The Financials (NYSEARCA:XLF), gained .5% to 15.77, right near major resistance of 15.75. Support is now at 15.75, 15.40, 15.30, 15.10, and 15.00. Next resistance at 16.00 and 16.25. GOLD(NYSEARCA:GLD) continued to lose ground and closed off .5% to 107.75. Remains in limbo. The VIX moved down .5% to 16.87.
Long term, technicals remain positive as we remain at new levels in the major indices. Short term, upward bias continues. Near term, after one session of consolidation, we reversed to the upside on weak volume. Look for pullbacks in strong sectors to enter Market. Today’s futures(at 8:15am) are mixed versus fair value. Economic recovery confirmation(e.g.-employment) and interest rates have become the key Market movers.
Major Economic Reports Today:
Existing Home Sales/Home Price Index-10:00am
MAJOR INDICES- Short term support and resistance levels.
DJIA-(close 10785) SP500-(close 1165) N100-(close 1949)
S R S R S R
10725 10800 1165 1170 1940 1950
10677 10898 1160 1175 1935 1963
10650 11000 1154 1187 1922 1975
10575 11254 1150 1200 1920 1994
10540 1143 1225 1900 2000
10500 1140 1895
10444 1135 1880
10355 1130 1875
Options/Derivative Flows-(From the desk of P.Weisbruch)
In XME (SPDR Metals and Mining) we saw buyers of the April 44-48-52 put butterly, 4000 times. After trading at a recent high a few sessions ago, XME has fallen rather sharply, by over 5%. In KBE (SPDR KBW Banking ETF) we saw buyers of April 25 puts, simultaneously selling April 24 puts. This is probably a participant "rolling up" in strike prices, expressing a bearish sentiment in the sector.
SMH(Semiconductor HOLDRs Tr)-Closed 27.99. Bounced off 27.30 early in the session and had a nice gain. Can still test Jan. highs of 28.52 if it holds these levels.
EWJ-(Ishares MSCI-Japan)-Closed 10.35. Bounced off support near 10.25 early in the session. Breaks out to new high above 10.50.
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