The Dow dipped 34 points, or 0.2%, to settle at 16,418 on Monday. The blue-chips traded to a low of 16,334 but cut the losses by 70% after rebounding to close above 16,400. Boeing (BA, $126.89, down $1.65) led the index lower as it accounted for over 10 negative points while International Business Machines (IBM, $186.39, down $1.29) spoke for another 8. Support is at 16,350 followed by 16,200. A close above 16,500 would be bullish.
The S&P 500 slipped a point, or 0.5%, to close at 1,877. The index traded down 1,867 but was able to hold support at 1,875. A close below this level could lead to a back test to 1,850. A close above 1,885 keeps 1,900 in play.
The Nasdaq dropped 2 points, or 0.04%, to end at 4,334. Tech tested a low of 4,307 but also held support at 4,300. A close below this level could lead to 4,250-4,200, quickly. If the index can clear 4,350 and hold 4,375 there could be a continued run to 4,400-4,500.
The Russell 2000 declined 3 points, or 0.2%, to finish right 1,200.54. The small-caps touched 1,193 an hour after the open but held support at 1,200 by a half point by the close. There is risk to 1,175 on a finish below this level while a close above 1,215 keeps 1,225 in play.
The S&P 500 Volatility Index ($VIX, 14.20, up 0.09) traded to a high of 15.28 but stayed below 15 after finishing near its lows. This was a slightly bullish sign but there is still risk up to 17.50 as long as the bears hold 13.50. Otherwise, new highs are in store.
As we head from desk to press, here is how futures are shaping up: Dow (+7); S&P 500 (-1); Nasdaq 100 (+1).
Subscribers, check the Members Area for the current updates. We have also added some new ideas for this week on possible earnings and index trades so put them on your Watch List as well. Some of them could become official recommendations at some point and we want you to be ready.
Side Note: One stock that regularly appears on our Watch List from time-to-time, Green Mountain Coffee Roasters (GMCR, $133.99, down $2.01), has officially changed its name and will be now known as Keurig Green Mountain. We have traded options on this stock in the past and probably will in the future but the ticker symbol will remain the same. Research in Motion changed its name to BlackBerry (BBRY, $9.67, down $0.24) a couple of years ago along with the ticker symbol so we don’t have to worry about that with GMCR.