U.S. markets opened higher following better-than-expected economic reports, including monthly retail sales figures and weekly jobless claims data.

The rebound from prior session losses lost a little steam afterwards as the blue-chips and small-caps fell into negative territory. Meanwhile, Tech zoomed to a fresh all-time high as volatility matched its weekly low intraday and is still signaling higher highs for the overall market.

The Nasdaq surged 0.9% after tapping a record high of 7,768 while recording its 100th record close since the Presidential election.

The S&P 500 advanced 0.3% after making a run to 2,789 with major resistance from mid-March at 2,800 still in play.

The Russell 2000 gained 0.5% after closing north of 1,684 and session high while failing a fresh record peak for a 2nd-straight session by less than 2 points.

The Dow dropped 0.1% following the backtest to 25,138 with support at 25,000 easily holding for the 2nd-straight day.

Utilities spiked 1.2% while Consumer Discretionary and Real Estate advanced 1% to lead sectors winners. Technology was up 0.7%.

Financials fell 0.9% to pace sector laggards while Industrials gave back 0.4%. Energy was down 0.2%.

Global Economy – European markets rallied after the ECB said it will wrap up bond purchases by the end of 2018 and keep interest rates low for at least another year.

Germany’s DAX 30 surged 1.7% and France’s CAC 40 jumped 1.4%. The Stoxx 600 Europe soared 1.2% and UK’s FTSE 100 gained 0.8%. The Belgium20 added 0.4%.

The ECB announced it would continue its program of buying 30 billion euros a month of bonds through September, as planned. The purchase amount will then be reduced in October to 15 billion euros a month and run through the end of December and when they will end.

The ECB also said it plans to keep reinvesting principal payments from maturing securities purchased under the asset-purchase program for an extended period of time after the end of the net asset purchases and as long as policy makers feel its necessary to provide an ample degree of accommodation.

ECB President, Mario Draghi, said the central bank now sees 2018 eurozone growth at 2.1%, down from a previous forecast of 2.4%.

UK May retail sales ex-auto fuel rose 1.3%, topping expectations of 0.3%. May retail sales including auto fuel also was up 1.3%, well above forecasts of 0.5%.

Asian markets settled mostly lower following weaker-than-expected economic data out of China.

South Korea’s Kospi sank 1.8% and Japan’s Nikkei fell 1%. Hong Kong’s Hang Seng declined 0.9% while China’s Shanghai slipped 0.2%. Australia’s S&P/ASX 200 was off 0.1%.

China May industrial production rose 6.8% year-over-year, below estimates of 7%.

China May retail sales were higher by 8.5% year-over-year, below expectations of 9.6% growth.

Jobless Claims declined 4,000 to 218,000 in the week ending June 9th.

Retail Sales climbed 0.8% in May, and gained 0.9% excluding autos, both of which were better-than-expected.

Import and Export Prices rose 0.6% in May, both of which were stronger than expected gains.

Business Inventories were up 0.3% in April with sales up 0.4%, matching forecasts.

Atlanta Fed’s Q2 GDPNow estimate was boosted to 4.8%, up from 4.6%.

The nowcast of 2Q real personal consumption expenditures growth increased from 3.4% to 3.6%.

Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) traded in positive territory throughout the session while reaching a peak of $120.30.

Fresh resistance is at $120.50-$121 on continued strength. Rising support is at $119.50-$119 and the 50-day moving average.

Market Analysis – The Spiders Dow Jones Industrial Average ETF (DIA) fell for a 3rd-straight session following the fade to $251.54.

Support at $251.50-$251 held and represents prior mid-May resistance. A close below $250 would signal a short-term top.

Resistance is at $253-$253.50 with continued closes above the latter signaling a possible push towards $254-$255.

RSI is in a slight downtrend but is trying to level out with current support at 60 in play. A close below this level could signal additional weakness towards 55-50.

Resistance is at 65 with continued closes above this level being a bullish development.

The Consumer Staples Select Spiders (XLP) traded higher for the 6th time in 7 session on the run to $51.32. Lower resistance at $51.25-$51.50 was cleared and held with continued closes above the latter being a bullish sign.

Near-term support at $51-$50.75. The breakout of the May tight trading range range between $49-$50 was a bullish development.

However, this area would be back in play on a close below $50.50 and the 50-day moving average that is showing signs of leveling out.

RSI has cleared January resistance at the 60 level and could make a push towards 70 on continued momentum.

A close back below 60 would be a slightly bearish development with further weakness towards 55-50.

Existing Position Update

AMZN remains within zone of safety and I’m expecting increased decay over the next few sessions.

PYPL still has plenty of time to see selling pressure.

TSLA remains a cheaper to keep than to offset at this time.

I should have another position either tomorrow or early next week.

Markets are becoming increasingly overbought and that creates opportunity…if we are patient.

Roger Scott