"The S&P 500 Index (SPX) held the 1,840 area, which had been support since early March," observed Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "After the drop the past three days, it was nice to see the bulls show some life. With many momentum names extremely oversold, a bounce could happen at any time. Still, you could have said that last week, and many continued to drop. Be very cautious out there." After three days in the red, the Dow Jones Industrial Average (DJI) spent time on both sides of the breakeven mark before ending with a minimal gain.
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The Dow Jones Industrial Average (DJI - 16,256.14) started the day slightly lower, popped into the green before noon, and hovered around the flat line before settling with an increase of 10.3 points, or less than 0.1%. Seventeen of the 30 Dow components gained ground today, led by a 3% rally in Nike Inc (NYSE:NKE). Bringing up the rear was Goldman Sachs Group Inc (NYSE:GS), which settled on a 1.3% decline.
The S&P 500 Index (SPX - 1,851.96) followed a similar morning path as its blue-chip brethren, but closed with a more impressive gain of 0.4%, or 6.9 points, retaking the 1,850 level. The Nasdaq Composite (COMP - 4,112.99) bounced on the heels of its worst three-session drop since 2011. At the close, the tech-rich index was up 33.2 points, or 0.8%.
The CBOE Volatility Index (VIX - 14.86) peeked into the green in early trading, but was otherwise mired south of breakeven, settling off 0.7 point, or 4.4%, to move back south of the 15 mark.
A Trader's Take:
"The rotation from higher momentum names and into steel and commodities continues," added Detrick. "It is important to remember the SPX is up five straight quarters and the Russell 2000 Index (RUT) is up a record seven quarters in a row. Some type of weakness or consolidation is perfectly healthy. Yes, we all know this bull market is five years old, but many forget that 2011 was exactly flat, yet earnings grew 14.5%. With the SPX pretty much flat for the year, could we be seeing a similar scenario play out?"
5 Items on Our Radar Today:
For a look at today's options movers and commodities activity, head to page 2.
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