U.S. markets opened slightly higher as there was little reaction to the contentious G-7 meeting over the weekend despite President Trump leaving early while highlighting the divisiveness over the trade disputes among the allies.

Trading was choppy afterwards with a slight pullback as Wall Street turned its focus towards the upcoming U.S.-North Korea summit. However, upside momentum resumed after the White House said negotiations are ahead of schedule, which may bode well for a plan to de-nuclearize the Korean peninsula.

The Nasdaq was up 0.2% after reaching a midday peak of 7,677 while coming within 20 points of a fresh all-time high.

The Russell 2000 added 0.1% following the morning run to 1,677 while missing another record high by just over 2 points.

The S&P 500 gained 0.1% after testing a high of 2,790 with major resistance at 2,800 holding.

The Dow was up for the 6th-time in 7 sessions after rising nearly 6 points, or 0.02% while tapping 25,402 intraday.

Consumer Staples and Energy showed the most sector strength with gains of 0.8% and 0.5%, respectively.

Utilities were weak after slipping 0.3% while Financials dipped 0.2%. Real Estate was the only other sector laggard, slipping 0.03%.

Global Economy – European markets were higher with Italy’s market posting its best session in more than a year after the country’s new finance minister offered reassuring comments about the eurozone.

The Belgium20 jumped 1.2% while UK’s FTSE 100 and the Stoxx 600 Europe were up 0.7%. Germany’s DAX 30 rallied 0.6% and France’s CAC 40 advanced 0.4%

UK April industrial production unexpectedly fell 0.8%, weaker than expectations for a rise of 0.1%.

UK April manufacturing production declined 1.4%, well below forecasts for a gain of 0.3%.

Asian markets were mixed ahead of the U.S.-North Korea summit with better-than-expected economic news our of China and Japan.

South Korea’s Kospi soared 0.8% and Japan’s Nikkei rose 0.5%.

Hong Kong’s Hang Seng climbed 0.3%. China’s Shanghai fell 0.5% and Australia’s S&P/ASX 200 slipped 0.2%.

China May CPI rose 1.8% year-over-year, matching forecasts. May PPI rose 4.1%, stronger than expectations of 3.9%.

Japan April core machine orders surged 10.1%, stronger than forecasts for a rise of 2.4% and the largest increase in over two years.

There was no major U.S. economic news today.

Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) traded lower for the 2nd-straight session following the backtest to $118.94.

Upper support at $119-$118.50 and the 50-day moving average was breached but held into the closing bell. Lowered resistance remains at $119.75-$120.25.

Market Analysis – The Russell 2000 ETF (IWM) tested a high of $167.11 with near-term resistance at $167-$167.25 holding.

Last week’s all-time high reached $167.23 with continued closes above $167.25 leading towards a possible run at $169-$170.

Current support is at $166.25-$166 with a move below $164 signaling a short-term top.

RSI is trying to hold support at 70 with continued closes above this level signaling additional strength and a push towards 75-80 and June/ January highs. S

upport is at 65-60 with a move below the latter signaling additional weakness.

The Spider Gold Shares (GLD) have been in a mini trading range between $122-$123.75 since mid-May with today’s high reaching $123.42. Continued closes above the latter would be a slightly bullish development with fresh resistance at $124 and the 200-day moving average.

The 50-day moving average has been in a downtrend since late April and is showing signs of falling below the 200-day moving average.

This would form a death cross and is typically a bearish technical setup for lower lows.

Current support is at $122.75-$122.50. A close below $122 would signal additional weakness towards the $121-$120 area.

RSI is in a slight uptrend with mid-May resistance at 50. Continued closes above this level would be a slightly bullish signal. Support is at 45-40.

Current Position Update

TSLA spread price is over the spread value – which means waiting till expiration is cheaper than closing it out. Keep in mind, since both sides of the spread are in the money – we can expect both to exercise and offset each other.

If one side of the spread was in the money it would be a different story – and we would have to manually exercise the position before expiration on Friday.

I’m watching the position closely and will alert you if that occurs.

If we let the spread expire – we keep premium from both the bear call side and put side – and our risk is the difference between the two strike prices on the bear call side -which is $2.50.

PYPL stopped trading higher. Expect more downside over the near term. I’m looking to turn position int0 an iron condor next few sessions.

Expect another position tomorrow or next day – I want to see a bit of increase in volatility over the near term.

Roger Scott