The bulls needed a big win on Monday following last week’s technical damage and while it wasn’t pretty, the market ended higher. The bears made a late day cameo and tried to halt the momentum as Tech and small-caps faltered but the bulls recovered to get a clean sweep.
The Dow jumped 146 points, or 0.9%, to finish at 16,173. The blue-chips held positive territory throughout the session and reached a peak of 16,184. The bears held resistance at 16,200 and the 50-day MA after pushing a low of 16,028 late in the day to remind traders they are still trying to get the index below 16,000.
The S&P 500 added 15 points, or 0.8%, to settle at 1,830. The index cleared its 100-day MA (moving average) at 1,828 after trading to a high of 1,834 and holding this level into the close. The late day pullback to even was disturbing as the bears are still eyeing 1,800 but the recovery back above 1,825 by the close was reassuring.
The Nasdaq gained 23 points, or 0.6%, to close at 4,022. We wanted to see Tech clear and hold 4,050-4,025 after kissing 4,050.79 but the late-day fade hurt those chances. The bears made a late-day charge to push a low of 3,986 but were unable to hold the losses. There is further risk to 3,950-3,900 on a close below 4,000. The 200-day MA is at 3,939.
The Russell 2000 advanced 4 points, or 0.4%, to end at 1,115. The small-caps made a run past 1,125 to 1,126.31 but were unable to hold this level as the bears pushed a low of 1,105 late in the session. Although there was a bounce, it was a lower low than Friday and keeps 1,075 in play.
The S&P 500 Volatility Index (VIX, 16.11, down 0.92) fell 5% after peaking at 17.40. The VIX held the 17.50 level on the late day drama while closing below 16.50. The index continues to be a great indicator for us despite another well-known talking head denouncing the VIX by saying he pays absolutely no attention to it. A close below 15 today or this week would be super bullish.
The bulls took a big step in recovering last week’s setback but are still on shaky ground. The indexes are 1% away from a domino effect on continued weakness and another 2% away from recovering prior support levels. Another positive close today will help get the seesaw action back in the middle.
As we head from desk to press, futures look like this: Dow (+31); S&P 500 (+3); Nasdaq 100 (+9).