U.S. markets continued record run into blue-sky territory on Wednesday’s open but settled mostly lower after setting fresh intraday all-time highs.

The Dow closed in the green for the 3rd time over the past four sessions after rising 0.2% and trading to an intraday all-time peak of 26,392. The S&P 500 made a record run to 2,852 before slipping 0.1% into the closing bell to snap a three-session winning streak.

The Nasdaq gave back 0.6% after peaking at 7,486 but was able to hold the 7,400 into the close after falling below this level intraday.

The Russell 2000 dropped 0.7% after tapping a record high of 1,615 before closing back below the 1,600 level.

Financials rose 0.7% to lead sector strength while Consumer Discretionary and Materials advanced 0.4%. Technology and Utilities lagged after giving back 0.8% and 0.6%, respectively.

Global Economy- European markets closed lower across the board to snap a four-session winning streak. UK’s FTSE 100 and Germany’s DAX 30 tanked 1.1% while France’s CAC 40 sank 0.7%. The Stoxx Europe 600 fell 0.5% and the Belgium20 declined 0.4%.

The Eurozone January Markit composite PMI unexpectedly rose 0.5 to 58.6, stronger than expectations for a drop of 0.2 to 57.9.

The Eurozone January Markit manufacturing PMI fell 1 to 59.6, weaker than expectations of for a decline of 0.3 to 0.3.

The German January Markit/BME manufacturing PMI fell 2.1 to 61.2, weaker than expectations for a dip 0.3 to 63.

Asian markets were mixed with Hong Kong’s Hang Seng adding 0.1% while closing higher for the 21st time over the past 22 sessions. China’s Shanghai added 0.4% and Australia’s S&P/ASX 200 advanced 0.3%. South Korea’s Kospi climbed 0.1% while Japan’s Nikkei slid 0.8% to close back below the 24,000 level.

The Japan January Nikkei manufacturing PMI rose 0.4 to 54.4

MBA Mortgage Applications were up 4.5% for the week ending January 19th. The average 30-year fixed mortgage rate rose 3 basis points to 4.36%.

FHFA House Price Index rose 0.4% month-over-month versus consensus for a rise of 0.5% for the month.

PMI Composite Flash improved to 55.5 for January and ahead of expectations for a print of 55.

Existing Home Sales dropped 3.6% to 5,570,000 in December after climbing 5.1% to 5,780,000 million in November.

Market Sentiment- The Senate confirmed Jerome Powell as next Fed chair with the vote tally at 85 to 12. Powell has been a Fed governor since 2012, and Wall Street clearly hopes he will be a continuity chairman that extends the policy and approach of Fed Chairwoman Janet Yellen.

Powell was somewhat guarded during the confirmation process and gave few details. He said he expects interest rates to rise somewhat further and for the balance sheet to shrink over the next three or four years.

Powell’s term will begin after February 3rd as Yellen will lead the Fed’s rate-policy committee meeting next week.

The Fed’s vice chairman job is also open and three other seats on the seven-member board need to be filled. The 12-member board permanently consists of the seven Fed board members in Washington and the New York Fed president.

Four of the 11 remaining presidents of regional Fed banks also rotate onto the FOMC each year.

The iShares 20+ Year Treasury Bond ETF (TLT) traded in negative territory throughout the session while bottoming at $122.54.

Upper support is at $123-$122.50 held with a close below the latter leading to $122-$121.50. Resistance remains at $123.50-$123.75 and the 200-day moving average.

Market Analysis- The Russell 3000 Index ($RUA) made a run to an all-time high of 1,685 with fresh resistance at 1,690-1,700 coming into play.

We mentioned earlier this month a run towards 1,660-1,675 could come on continued momentum with the former now serving as short-term support.

RSI is in a slight downtrend after peaking north of the 85 level and clearing 80 and October resistance. Support is at 70 on a move back below 80.

Bitcoin Investment Trust (GBTC) is an ETF that seeks to mirror the price action of bitcoin and recently announced a 91-for-1 stock split of bitcoin.

This will drastically reduce making GBTC more accessible to retail investors for around $18.35 at current levels. The split takes place on January 26th.

The current chart shows GBTC is struggling with near-term resistance at $1,700-$1,800 and the 50-day moving average. Continued closes above the latter could lead to a short-term recovery towards the $2,000-$2,250 area.

Near-term and shaky support is at $1,500-$1,400 with a close below the latter signaling additional weakness.

RSI is trying to clear resistance at 50 and a level that served as prior support and early November and December support.

Continued closes above this level would be a slightly bullish development. A move below 40 would signal additional upcoming weakness.

Existing/New Position Update

TSLA remains in range and I’m anticipating mild corrective pressure over the near term, since there’s no major catalyst, earnings are few weeks away and overall market is turning south.

We can anticipate lack of directional bias to control the stock over the near term.

I’m currently targeting 3 iron condor spreads – I want to give volatility a chance to rise –

I intend to initiate another position before end of the week to take advantage of a bit of premium decay. 

Roger Scott