U.S. markets showed continued momentum to start the week after Mexico reached a deal to avoid the implementation of tariffs that were set to start on Monday.
Meanwhile, Meanwhile, President Trump said he believes China will make a deal with the U.S. because they’re going to have to, adding the country is getting absolutely decimated by companies that are leaving China, going to other countries, including our own.
The higher highs continue to push key resistance levels but volatility only eased slightly and remains in neutral territory.
Fed speak is in a quiet period until next week’s minutes but talks of a rate cut, or two, continue to help momentum.
The S&P 500 extended its winning streak to 5-straight sessions after adding 0.5% while trading to a high of 2,904.
Prior and lower resistance from early May at 2,900-2,925 was cleared but held on the 2nd-straight close above the 50-day moving average.
The Dow was up for the 6th-straight session after gaining 0.3% and testing an intraday high of 26,210.
Near-term and lower resistance at 26,000-26,250 was recovered and held on the close back above the 50-day moving average.
The Nasdaq was higher by 1.1% after reaching a late day peak of 7,895 to
extend its winning streak to 5-straight sessions. Resistance from a month ago at 7,850-7,900 and the 50-day moving average was challenged but held.
The Russell 2000 climbed 0.6% following the intraday push to 1,535.
Lower and major resistance at 1,525-1,540 was cleared but held with more important hurdles at 1,545-1,560 and the 200/50-day moving averages.
Technology jumped 1% rallied to lead sector strength while Financials and Consumer Discretionary advanced 0.9%.
Utilities and Real Estate paced sector laggards after falling 0.7% and 0.4%, respectively.
Communication Services dipped 0.1% to round out the losers.
Imports sank 8.5% versus forecasts for a drop of 3.8%. Overall, China had a trade surplus of $41.65 billion for the month.
Jolts reported job openings dropped 25,000 to 7,449,000 in April, after bouncing 332,000 to 7,474,000 in March, and topping forecasts of 7,400,000.
The rate was unchanged at 4.7%, and is up from 4.5% in February. April hirings climbed 240,000 to 5,937,000 following the prior 2,000 gain to 5,697,000.
The hire rate edged up to 3.9% versus 3.8%. Quitters increased 21,000 to 3,482,000 after rising 14,000 to 3,482,000. The rate was unchanged at 2.3%.
May TD Ameritrade IMX Level checked in at at 4.93.
Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) fell for the first time in 3 session following the plunge to $130.32. Prior and upper support at $130.50-$130 was breached but held.
A close below the latter would signal a near-term top with risk towards $129-$128.50.
Lowered resistance is at $131-$131.50.
Market Analysis – The Spider Small-Cap 600 ETF (SLY) was up for the 2nd-straight session after testing an intraday high of $66.41.
Current and lower resistance at $66.50-$67 held with more important hurdles at $67.50-$68 and the 50/200-day moving averages.
Near-term support at $65.50-$65.
A close below the latter would be a renewed bearish signal with downside risk towards $63.50-$63 and the late May low of $62.97.
RSI is in a slight uptrend with resistance at 50.
A move above this level would be a bullish signal for additional strength towards 55-60 with the latter representing the peak throughout much of April and into early May.
Support is at 45-40.
The Utilities Select Spider (XLU) was down for the 2nd-straight session after testing an intraday low of $59.35. Upper support from late May at $59.50-$59 was breached but held.
A close below the latter opens up risk towards $58.50-$58 and the 50-day moving average.
Lowered resistance is at $60-$60.50.
A close above the latter would be a renewed bullish signal with fresh resistance at $61-$61.50 with last Friday’s all-time high at $61.19.
RSI is in a downtrend with support at 55-50.
A move back below 50 would signal additional weakness towards 45-40 with the latter representing the late May low.
Resistance is at 60-65.
Volatility Index – The S&P 500 Volatility Index ($VIX) fell for the 4th time in 5 sessions despite the 2nd-half rise to 16.47.
Near-term and lower resistance at 16.50-17 and the 200-day moving average held with a close above the 17.50 level being a bearish signal.
The fade to 15.84 afterwards tripped upper support at 16-15.50 but a level that held into the closing bell.
A close below 15 and the 50-day moving average would be a comtinuing bullish signal for the market.
We are allocating the portfolio as follows:
60% in ZIV closed on Monday at 73.00
40% in EDV closed on Monday at 125.20
All the best,
Roger Scott.