Bulls Having Trouble with May Intraday Highs
The market was choppy for much of Monday's first half of trading but picked up steam during the second half as the bulls continue to push new highs. The third-straight up Monday continues to show money is coming into the market as Wall Street pros and hedge fund managers throw in the towel but there are still a few technical hurdles that remain.
The headlines will read the major indexes closed at new highs but 2 of the major 4 averages continue to struggle with their May intraday highs. The chances are good they will fall but it is something we continue to watch carefully as it could also mean a "double top". Volume was also weak and was the lowest of the year for a full trading session with just 4.9 billion shares exchanging hands. Today's action could be much the same as Wall Street awaits more Ben Bernanke testimony.
The Dow added 20 points, or 0.3%, to finish at 15,484. The blue-chips traded to a high of 15,509 but continue to struggle in getting a strong push past resistance. A close above 15,500, and more importantly, 15,600, should be enough to get new all-time highs in play.
The S&P 500 advanced 2 points, or 0.1%, to settle at 1,682. The index traded up to 1,684 after testing a low of 1,677. Support at 1,675 continues to hold and a break above 1,687 (May 22 intraday peak) should get 1,700 in play. Monday's win made it 8-straight sessions of gains for the index.
The Nasdaq jumped 7 points, or 0.2%, to close at 3,607. Tech dipped below the 3,600 level to 3,591 but easily held near-term support at 3,575-3,550. We mentioned a run to 3,650-3,700 is possible on continued strength over the next few weeks as long as support holds up.
The Russell 2000 was up 7 points, or 0.7%, to end at 1,043- and another all-time high. The small-caps continue to lead the charge higher and are rapidly approaching our fluff target of 1,050 after holding green start to finish. Support is trying to move up from 1,000 to 1,025.
The S&P 500 Volatility Index ($VIX, 13.79, down 0.05) was quiet as it traded in a tight range along with the indexes. A close below 13.50 could lead to a continued run higher on the S&P while a break back above 15 could signal a pause in the recent rally.
As we head to press, futures look like this: Dow (+3); S&P 500 (+1); Nasdaq 100 (+3). Subscribers, check the Members Area for the current updates.
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