8/9/2013 Bulls Bounce Back 9:00am (EST) The Dow added 27 points, or 0.2%, to close at 15,498. The blue-chips traded to a low of 15,418 and we mentioned it would be crucial they held 15,400. Check. While we knew the rebound off the lows didn’t have enough momentum to clear resistance at 15,600, we wanted to see the bulls clear 15,500 into the close and you see where they ended. If there is a triple-digit drop today we could use put options on the break below 15,400 but we usually don’t open new positions on Friday’s. However, we do believe the next 100 points up or down on the Dow will be the start of the next trend. The S&P 500 gained over 6 points, or 0.4%, to settle at 1,697.48. The index fell to a low of 1,688 and we have warned a drop below 1,685 could lead to 1,675-1,650. The high checked-in at 1,700.18 as the bulls just missed the all clear sign. A close above 1,700 would be bullish for a run to 1,710 and would rekindle our 1,725 target The Nasdaq popped 15 points, or 0.4%, to finish at 3,669. Tech fell to a low of 3,649.64 and tripped the 3,650 level before making at run at 3,675 (.71). We said a close back above this level could lead to a run at 3,700 again but both the bulls teased each other and us from initiating new positions. The Russell 2000 advanced 5 points, or 0.5%, to end at 1,049.38. The small-caps traded down to 1,044 but easily avoided the trap door at 1,040. The index reached a peak of 1,051.82 but failed to hold 1,050. The S&P 500 Volatility Index ($VIX, 12.73, down $0.25) traded up to 13.13 and held 13.50 again before dropping 2%. As you can clearly see and read, the market is still in a mini-trading range with pressure to the downside if there is another pullback today. A bullish Friday and a close above the levels we have outlined could lead to higher prices next week while a close below support could be the start of a leg lower. As we head to press, futures are shaping up for a positive open: Dow (xx); S&P 500 (xx); Nasdaq 100 (xx). Keep an eye on our possible index option trades because we could take one or two of them if we get the signal. Subscribers, check the Members Area for the updates.
Posted on: Fri, 09 Aug 2013 17:03:26 +0000
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