June 29th, 2011
The bulls were eager to get off to a good start on Monday as they looked to get back on track after two months of selling pressure. The major indexes started off slow but were able to push through key resistance levels as the momentum got stronger throughout the day. The bears were able to knock a little fluff off the top into the closing bell but they were a non-factor for much of the day as buyers came in at support and held the 200-day moving averages.
The Dow added 108 points, or 0.9%, to finish at 12,043. The index made back all of Fridays losses and reclaimed the 12,000 level in the process after trading to a high of 12,098 intraday. There could be a test up to 12,350 if 12,200 is cleared while support remains at 11,800.
The S&P gained nearly a dozen points, or 0.9%, and settled at 1,280. The bulls made it back above the 1,275 level which was important as they look to make another run at 1,300 after kissing 1,285 yesterday. There is still strong support at 1,250 which has been holding up like a rock.
The Nasdaq regained its footing and surged over 35 points, or 1.3%, and closed at 2,688. Tech touched a top of 2,697 and was within shouting distance of our 2,700 target. The index traded to a low of 2,647 and still faces risk down to 2,625-2,600 but if 2,700 is cleared, watch out bears.
The big news over the next 24 hours will be the vote on Greece and whether or not they get another infusion of cash. The French banks agreed yesterday to accept slower repayments from Greece which will allow them more time to meet other obligations but the country is still facing tough budget cuts and the vote is going to be close.
The market is pricing in smooth sailing but if major resistance levels aren’t cleared and Greece doesn’t get a bailout then we will have another pullback, and possibly a correction, for the market.
As far as stocks to watch, Nike (NKE, $81.62, up $0.44) is looking to trade higher after beating Wall Streets expectations after the close yesterday. We profiled a straddle option trade yesterday as a show-and-tell trade and we will go over the results in our afternoon update. Shares were up 5% in after-hours last night and are at $85-and change in pre-market action.
Futures are pointing towards a slightly higher open this morning. Dow futures are up 40 points to 12,030 while the S&P futures are higher by 4 points to 1,280. Nasdaq futures are showing an 8 point pop and are at 2,257.
As usual, we have a lot to c
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