U.S. markets opened strong and showed steady momentum throughout Monday’s action following chatter China and U.S. trade talks are progressing with tarriffs on hold.

U.S. Secretary Steve Mnuchin said the U.S. won’t impose tariffs on China, for now, and China proposed to significantly increase purchases of U.S. goods and services.

Volatility remains relaxed and is trying to clear a key level of support to confirm a continued rally this week and possibly into early June.

The Dow traded higher for the 11th-time in 13 sessions after jumping 1.2% while reaching a peak of 25,086 and holding the 25,000 into the closing bell.

The S&P 500 soared 0.7% after making a morning run to 2,739 and coming within 3 points of the monthly high at 2,742.

The Russell 2000 closed at a fresh all-time high for the 4rd-straight session after gaining 0.7% and reaching an intraday peak of 1,639. The Nasdaq climbed 0.5% after testing a high of 7,431 but fell shy of holding the 7,400 level by a 6-pack.

Industrials led sector winners for a 2nd-straight session after surging 1.5%.

Real Estate rose 1% while Energy and Technology advanced 0.9%. There were no sector laggards.

Global Economy – European markets showed strength to start the week despite continued ongoing political chatter from Italy. The coalition party proposes to issue short-term credit notes that threaten to increase borrowing in one of Europe’s most indebted economies.

UK’s FTSE 100 rallied 1% while France’s CAC 40 and the Belgium20 climbed 0.4%. The Stoxx 600 Europe was up 0.3%. Germany’s DAX 30 was closed for a holiday.

ECB Governing Council member Nowotny said the Eurozone economy isn’t overheating and inflation won’t pick up dramatically, but proposals from parties forming a government in Italy are creating a lot of nervousness, and he hopes the actual policies will be much wiser than the proposals.

Asian markets closed mostly higher after fears of a trade war between the U.S. and China receded although negotiators refused to put a dollar amount on it.

Hong Kong’s Hang Seng and China’s Shanghai rose 0.6%. Japan’s Nikkei was up 0.3% and South Korea’s Kospi gained 0.2%. Australia’s S&P/ASX 200 slipped 0.1%.

Japan April trade balance fell to a surplus of 626 billion yen, wider than expectations of 440 billion yen. April exports rose 7.8% year-over-year, weaker than forecasts of 8.7%. April imports rose 5.9%, weaker than expectations of 9.8%.

Chicago Fed National Activity Index checked in at 0.34, topping forecasts for a print of 0.25.

Market Sentiment – Philadelphia Fed President Patrick Harker that he currently sees two more interest rate hikes this year, but said it is possible he could support a third increase.

Harker said inflation does seem to be moving toward the central bank’s 2% target and said it was appropriate to moves rates up judiciously.

The iShares 20+ Year Treasury Bond ETF (TLT) closed higher for a 2nd-straight session after testing an intraday high of $117.38. Fresh resistance at $117.50-$117.75 held with a close above $118 being a slightly bullish signal.

Short-term support remains at $117-$116.50 with a close below $116 signaling additional weakness.

Market Analysis – The Spider S&P 500 ETF (SPY) broke out of a four-session mini trading range after tapping an intraday high of $273.98. February and March resistance at $274.50-$275 held with continued closes above the latter leading to a possible run towards $277.50-$278.

Rising support is at $272.50-$272 with a close below $270.50-$270 being a slightly bearish development.

RSI is back in an uptrend with near-term resistance from earlier this month in the 65 area.

Continued closes above this level would be a bullish development for a run towards 70 and major support from December. Current support is at 60-55.

Bitcoin Investment Trust (GBTC) has been in a bearish downtrend since late April with lower highs and lower lows throughout this month.

Upper resistance at $13.50-$13.75 held on Monday’s rebound to $13.98 with the close between the 50/200-day moving averages giving a neutral reading. Continued closes back above $14 would be a slightly bullish signal.

Near-term support is at $13.50-$13.25 followed by mid-April help at $13-$12.50.

We mentioned late last month a possible death-cross had been avoided as the 50-day moving average had leveled out on the run to $16.88 and the April peak.

This technical setup is back in play with the current gap between the 50/200-day moving averages at just 8 cents, down from Friday’s 16-cent spread. If confirmed, this bearish setup with the 50-day moving average closing below the 200-day moving average could lead to lower lows.

RSI has been in a downtrend since peaking in mid-April but is trying to level out.

Support is at 40 with a move below this level signaling additional weakness and a continued backtest towards 35-30 and April/ March lows. Resistance is at 50.

Existing Position Update

New TSLA iron condor initiated today.

Expect price to congest and possibly a bit more downside in the next few days since stocks are showing signs of stagnation.

NFLX remains within our channel but getting a bit close to the upside. If I see danger zone approaching next few sessions, we will roll the spread further out. Due to positive news re China trade war – we may see higher price next few session, which would make the roll over worth taking.

Roger Scott