U.S. markets showed continued momentum on Monday with key levels of resistance back in play amid hopes for cooling trade tensions between the U.S. and China.
Economic news was light but picks up throughout the week with Friday’s jobs report taking center stage. Fedspeak will also be present along with Q1 earnings as the major indexes continue to try and establish the next major trend.
The Russell 2000 showed the most strength after rising 0.9% and trading to a high of 1,586 with major resistance at 1,590 now in play. The Nasdaq climbed 0.8% after tapping an intraday high of 7,291 while pushing resistance at 7,300 and the mid-April intraday high at 7,319.
The Dow gained 0.4% after making a morning run to 24,479 while closing above the 24,000 level for the 2nd-straight session. The S&P 500 was also up 0.4% after reaching a peak of 2,683 and mid-April highs.
Both indexes cleared their 50-day moving averages but levels that failed to hold.
Technology, Financials, and Industrials showed the most sector strength after rising 0.7%. Consumer Staples and Utilities were leading sector laggards after giving back and 0.6% and 0.5%, respectively.
Global Economy – European markets were mixed on thin trading as UK’s FTSE 100 and the Stoxx 600 Europe were closed for a holiday. Germany’s DAX 30 soared 1% and France’s CAC 40 was up 0.3%. The Belgium20 slipped 0.1%.
The Eurozone May Sentix investor confidence fell 0.4 to a 15-month low of 19.2, weaker than expectations of for a gain of 1.4.
German March factory orders unexpectedly fell 0.9%, weaker than expectations for a rise of 0.5%.
Asian markets were mixed with South Korea’s Kospi closed for a holiday. China’s Shanghai surged 1.5% while Australia’s S&P/ASX 200 was higher by 0.4%. Hong Kong’s Hang Seng added 0.2% and Japan’s Nikkei slipped 5 points, or 0.03%.
TD Ameritrade IMX for April checked in at 4.79.
Consumer Credit grew $11.6 billion in March, versus forecasts for an increase of $15.6 billion.
Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) traded to a high of $119.02 with near-term resistance at $119.25-$119.50 and the 50-day moving average holding.
The backtest to $118.74 held support is at $118.75-$118.50 and a mini-trading range that has been developing for the past 6 sessions.
Market Analysis – The Russell 2000 ETF (IWM) closed higher for the 4th-time in 5 sessions after making a strong push to $157.86 intraday.
Near-term resistance is at $157.50-$158 held with a close above $158.50 being a continued bullish signal. The mid-April high reached $158.38. Rising support is at $156-$155.50 with a move below $155 signaling a possible short-term top.
RSI is back in a solid uptrend with resistance at 60 and the mid-April high. Continued closes above 65 would be a very bullish signal for a run towards 70-75 and January peaks. Support is at 55-50.
The iShares PHLX Semiconductor ETF (SOXX) gapped to a high of $178.31 to extend its winning streak to 3-straight sessions. Fresh resistance at $179.50-$180 held with additional hurdles at $180.50-$181 and the 50-day moving average.
Near-term support is at $177-$176.50.
RSI is back above 50 could lead to a run towards 60 and mid-March resistance. Support is at 45-40.
Existing Position Update
TSLA not really showing much directional bias.
PANW is reaching for short call strike, but with a few days left before expiration I believe we will see bit of corrective pressure before price increases once again.
I’m going to have another position tomorrow and possibly one more before the end of the week if the broad market remains above the 50 day moving average.