"It took three days of trying, but the S&P 500 Index (SPX) finally cracked the 1,850 area and closed at a new all-time high," Schaeffer's Senior Technical Strategist Ryan Detrick, CMT, summed up. "We've been saying we expected this area to be some trouble, but the fact prices were able to consolidate near this area without seeing much of a big dip was a clue that maybe it would give way sooner rather than later. There's an old saying not to short a dull market, and the past three days were pretty dull." Against this backdrop, the Dow Jones Industrial Average (DJI) emerged from an early move south of breakeven to close 74 points higher.
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The Dow Jones Industrial Average (DJI - 16,272.65) spent a portion of the early morning below breakeven, but gained momentum throughout the day, ultimately closing up 74.2 points, or 0.5%. Verizon Communications Inc. (NYSE:VZ) rose 2.5% to lead the Dow's 22 advancers, while Caterpillar Inc. (NYSE:CAT) finished last with a 0.5% decline. McDonald's Corporation (NYSE:MCD) was unchanged on the day.
It was a photo finish for the S&P 500 Index (SPX - 1,854.29), which added 9.1 points, or 0.5%, to muster a new all-time closing high. The Nasdaq Composite (COMP - 4,318.93), meanwhile, neared a 14-year peak once again and settled 26.9 points, or 0.6%, higher.
The CBOE Volatility Index (VIX - 14.04) slumped as stocks rallied, but managed to hold north of the 14 level. By the close, the "fear gauge" had slipped 0.3 point, or 2.2%.
A Trader's Take:
"Fed Chair Janet Yellen didn't do anything to rock the boat this morning, and durable goods orders weren't too bad, either," added Detrick. "All in all, the bulls continue to be in control. If new all-time highs for the SPX weren't enough, the S&P 400 MidCap Index (MID) and Russell 2000 Index (RUT) also made new closing highs. The big laggards have been the Dow and the financial sector. Still, things look pretty good here. Sure, there are signs of some froth when you look at the moves in names like Tesla Motors Inc (NASDAQ:TSLA) and see Facebook Inc (NASDAQ:FB) paying $19 billion for WhatsApp, but when you consider short interest on SPX components is near a multi-year high, that shows there is the potential for a lot of short covering to drive things higher over the coming months. Then -- considering March and April have been two of the strongest months going back the past 20 years -- seasonality looks nice here."
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