U.S. markets opened in positive territory before turning mixed shortly afterwards with the blue-chips holding its gains while the other major indexes lost ground.

Tech and the small-caps triggered all-time highs but were unable to build on their gains as the overall settled mixed. Volatility stayed below a key level of support and remains slightly subdued ahead of ongoing trade talks and next week’s Fed news.

The Dow closed higher for the 2nd-straight session after gaining 0.4% while reaching an intraday peak of 25,326.

The S&P 500 traded in a 20-point range before slipping 0.1% following the backtest to 2,760 during the second half of action.

The Russell 2000 tested a fresh all-time intraday high of 1,679.99 before declining 0.5% and failing our near-term resistance at 1,680 by a whisker.

The Nasdaq made a run at 7,700 after tapping a lifetime intraday peak of 7,697 shortly after the open before a sharp 0.7% reversal ahead of the closing bell.

Energy and Utilities rose 1.5% and 0.7% to led sector winners. Consumer Staples gained 0.6%.

Technology dropped 0.9% while Materials were down 0.5% and were the inly sector laggards.

Global Economy – European markets were mostly lower following disappointing economic news out of Germany and a hour-long trading glitch on the open for London’s Stock Exchange.

France’s CAC 40 and Germany’s DAX 30 fell 0.2% while UK’s FTSE 100 was off 0.1%. The Stoxx 600 Europe was down 0.2% and the Belgium20 was up less than a point, or 0.02%.

UK May Halifax house prices rose 1.5% , stronger than expectations for a rise of 1%.

German April factory orders unexpectedly fell 2.5%, below forecasts for a gain of 0.8%.

Bank of England Deputy Governor, Dave Ramsden, struck a reassuring note about progression in the UK economy after saying the data they have received suggests an interpretation of the slowdown in Q1 as temporary.

Asian markets settled mostly higher with China’s Shanghai missing out after falling 0.2%.

Japan’s Nikkei rallied 0.9% and Hong Kong’s Hang Seng rose 0.8%. South Korea’s Kospi jumped 0.7% and Australia’s S&P/ASX 200 advanced 0.5%.

China’s foreign-exchange reserves in May fell $14.23 billion to $3.111 trillion, below forecasts for a $17 billion drop.

The Japan April leading index CI was up 1.1 to 105.6, matching expectations. Meanwhile, the April coincident index rose 1.7 to 117.7, slightly below forecasts of 117.8.

Initial Jobless Claims dipped 1,000 to 222,000 for the week ending June 2nd, below expectations for a print of 225,000. This brought the 4-week moving average to 225,500 from 222,750. Continuing claims rose 21,000 to 1,741,000 in the May 26th week.

The Quarterly Services Survey Information Revenue was up 1.7% for the quarter and 7% for the year.

The IBD/TIPP economic optimism index rose 0.6% to 53.9 in June from May’s 53.6. the index has been above the 50 threshold, which signals overall optimism, for 21 straight months.

Additionally, it’s still above the long-term average of 49.4. The June 6-month index fell 0.2% to 51.2 from 51.3 in May.

Consumer Credit for April came in at $9.3 billion but was expected to increase $14 billion after an $11.6 billion gain in March.

Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) surged to a late day high of $120.44 while regaining its 50-day moving average and holding lower resistance at $119.50-$120.

Continued closes above $120.50 would be a slightly bullish signal. Near-term support remains at $119-$118.50 with a move below the latter signaling additional weakness.

Market Analysis – The Spider S&P 500 ETF (SPY) traded to a high of $278.28 with February and March resistance at $277.50-$278.50 holding.

Continued closes above the latter would be a bullish development for a possible run towards $280-$282.50.

Current support is at $276.50-$275.50.

We highlighted the mini trading range throughout the back half of May between $71-$74 with the latter being in play on a move below the $275 level.

RSI has been in an uptrend with near-term resistance at 65-70. Continued closes above the latter would be a bullish signal. Current support is at 60.

The Industrials Select Sector Spider (XLI) rose for the 3rd-straight session and four of the past five after reaching an intraday peak of $76.29. Mid-May resistance at $76.50-$76.75 held with continued closes above $77 signaling renewed strength.

Support is at $76-$75.75 with the 50-day moving average back in an uptrend and a key level that held on late May continued weakness.

A double bottom just above the $74 level has been holding and can be attributed to the recent rebound.

RSI is trying to clear mid-May resistance at 60-65 with a move above the latter signaling renewed strength. Support is at 55-50 with a close below the latter being a bearish development.

Existing Position Update

PYPL looking much better than last few days. Overbought levels caught up with the stock. Expect reasonable pullback over the next few weeks.

TSLA looks substantially better than it did both yesterday and this morning. Again, overbought levels and reaffirmed ratings from several big banks pulled price lower.

It’s hard for stocks to escape their predominant trend – no matter how optimistic things are looking!

I have another spread that I will be initiating before end of day tomorrow – to take advantage of some decay before the weekend – stay tuned.

Roger Scott