"The S&P 500 Index (SPX) broke out to a new all-time intraday high today, while the Nasdaq Composite (COMP) hit its highest point in nearly 14 years," reported Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "Funny how just three weeks ago, the world was ending and emerging markets were going to lead a sell-off. Well, now we are making new highs, so it looks like that was yet another freak-out by investors following January's 6% dip." While the Dow Jones Industrial Average (DJI) failed to follow its index peers into new-high territory, it did enjoy another triple-digit gain.
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The Dow Jones Industrial Average (DJI - 16,207.14) bolted higher out of the gate and closed with a gain of 103.8 points, or 0.6%, to end the session back above its 40-day moving average. Of the 21 Dow advancers, UnitedHealth Group Inc (NYSE:UNH) was the top performer, rising nearly 3%. Verizon Communications Inc. (NYSE:VZ) paced the nine decliners with its 2.2% loss.
The S&P 500 Index (SPX - 1,847.61) tagged a new all-time intraday high of 1,858.71 before closing up 11.4 points, or 0.6%, just shy of a new closing peak. The index is now less than a point away from entering positive territory for 2014. Elsewhere, the Nasdaq Composite (COMP - 4,292.97) reached its highest level since April 2000, and ended 29.6 points, or 0.7%, higher.
The CBOE Volatility Index (VIX - 14.23) lost more ground, shedding 0.5 point, or 3.1%.
A Trader's Take:
"Similar to what we saw throughout 2013, we all know we are up a lot, and we know it won't last forever," added Detrick. "But on very mild pullbacks, the amount of fear that shows up is simply off the charts. This produces violent bottoms and subsequent bounces to new highs. What would scare me is a 4% dip followed by everyone saying, 'don't worry, the market will bounce like it always does...' Well, we haven't seen anything like that on pullbacks. Furthermore, we started noting over a week ago," Detrick continued, "that small-caps are starting to once again show some strength. That was a clue that stocks were ready to break out, and sure enough, it has happened. While the Russell 2000 Index (RUT) isn't at new all-time highs yet, it is very close. And bullish traders have to like seeing tech and small-caps taking charge here."
5 Items on Our Radar Today:
For a look at today's options movers and commodities activity, head to page 2.
The Case for Big Moves in IWM and QQQ
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