Bulls Win Volatile Session, Make Statement

9:00am (EST)

The market ended mixed on Tuesday following a midday swoon into negative territory and a rebound into the close.  With many Wall Street traders on spring break this week, volume has been light that tends to lead to choppy and volatile sessions.

The bears pushed the wiggle room we gave the bulls coming into the week as Tech and the small-caps tested their 200-day MA’s (moving averages).  We have said a close below key support levels could have us joining the bears, and at some point this will happen, but as long as the trading ranges stays intact, with a chance of higher highs, we’re sticking with the bulls.

The Dow advanced 89 points, or 0.6%, to close at 16,262.  The blue-chips made an opening run to 16,272 but reversed course shortly afterwards to test a low of 16,063.  The 200-point recovery and close above 16,200 and the 100-day MA was bullish and gets 16,350 back on the bulls radar.  Support is at 16,000 and it would be safe to say if 16,000 cracks, we will get aggressive with index put options.

The S&P 500 added a 12-pack,  or 0.7%, to end at 1,843.  The index reached a peak of 1,843 shortly after the open but faded down to 1,816 in the afternoon.  Support at 1,810 kept the bears from pushing 1,800 and will be the magic number to go short.  The bulls managed to push a higher high of 1,844 into the close and a move above 1,850 and the 100-day MA gets 1,875 back in the mix.

The Nasdaq added 11 points, or 0.3%, to settle at 4,034.  Tech tried to clear resistance at 4,050 after kissing 4,054 at the start of trading before tumbling over 100 points to a low of 3,946.  The bears came within 4 points of triggering the 200-day MA.  The close above 4k keeps the bulls in the game for a possible push to 4,100-4,200 but another close below this level will likely lead to further weakness.

The Russell 2000 popped 4 points, or 0.4%, to finish at 1,119.  The small-caps tried to clear resistance at 1,125 after testing 1,123 but fell below the 1,100 level to 1,095 intraday.  A close below 1,100 and the 200-day MA (1,106) will likely lead to 1,075-1,050 while a finish above 1,125 could lead to another run at 1,150.

The S&P 500 Volatility Index ($VIX, 15.61, down 0.50) traded down to 15.57 on the open before zooming to resistance at 17.50 and holding.  A close above this level would favor the bears while a drop below 15 helps the bulls.

Tuesday’s turnaround may have been the flush that weeded the weaker hands out of the market.  We have talked about the bearishness in recent weeks reaching an extreme but that the 3-year S&P 500 chart showed the uptrend still intact.  We have talked about the VIX, Monday/ Friday closes and trading ranges getting stretched.

Our current trades are holding up well and while we have plenty of room to add new ones, we are still being a little selective with our new candidates due to the volatility.  We have started to lock-in profits in some of them and we continue to be patient as we wait for the next MAJOR trend to develop.  There are plenty of opportunities for 1 and 2-day trades but our timing has to be flawless.  In the meantime, we can relax, enjoy our monster winners, and wait for the action to come to us.

As we head from desk to press, futures look like this:  Dow (+70); S&P 500 (+8); Nasdaq 100 (+16).

Bulls Hold Gains, Get Monday Win

9:00am (EST)

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).

Bulls Walking the Plank

DOW41314

9:00am (EST) The Dow dropped 143 points, or 0.9%, to close at 16,026 on Friday.  The Dow fell 167 points to close at 16,245 on Monday.  The blue-chips traded up to 16,421 on the open but ended at session lows while holding support.  Tuesday’s dip to 16,180 was textbook as the bears cracked 16,200 but […]

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Bears Push Fresh Lows

9:00am (EST) The Dow dropped 267 points, or 1.6%, to close at 16,170.  The blue-chips made an opening run to 16,456 but ended near session lows.  Resistance at 16,500 was once again a challenge and the fade back below 16,350 was bearish.  Support at 16,200 held but the low of 16,153 and close were lower than Tuesday’s […]

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Bulls Roll, Recover Resistance

9:00am (EST) The Dow gained 181 points, or 1.1%, to settle at 16,437.  The blue-chips stayed green from the start of trading into the close after reaching a peak of 16,438.  The close back above 16,400-16,350 keeps 16,600 and a run to fresh all-time highs in play.  Support has moved up from 16,200 to 16,350 but it […]

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S&P 500 Volatility Index (VIX) Back Below 15

9:00am (EST) The Dow added 10 points, or 0.1%, to settle at 16,256.  The blue-chips traded to a low of 16,180 shortly after the open as the bears cracked support at 16,200.  However, the pullback was bought as the index reached a peak of 16,296 and held the 16,250 level.  It wasn’t the best finish […]

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