U.S. markets showed continued momentum following Tuesday’s jobs data, as the news reflected a stronger economy with more job openings and more potential workers coming off of the sidelines.

The small-caps showed weakness an hour after the open and suggested early that the opening gains might be limited with near-term resistance levels holding.

Volatility made a lower low and remains in a relaxed atmosphere.

The Dow extended its win streak to 4-straight sessions after rising 0.6% and testing an intraday peak of 24,945. Resistance at 25,000 held and a level last seen in mid-June.

The S&P 500 was higher by 0.4% following its intraday push to 2,795.

Resistance at 2,800 held and a level that hasn’t been cleared since March 13th.

The Nasdaq advanced 3 points, or 0.04%, after trading to a first half peak of 7,777.

Resistance at 7,800 held with the all-time record high north of 7,806.

The Russell 2000 was the weakest link after falling 0.5% to snap a five-session win streak.

The small-caps closed back below 1,700 after making a fresh lifetime high north of 1,708 by a just over a half-point.

Consumer Staples lead sector strength after rising 1.2% while Utilities and Materials gained 1% and 0.8%, respectively.

Financials and Communication Services were the only sectors to post losses after falling 0.3% and 0.04%.

Global Economy – European markets closed near 3-week highs despite worries about a fresh general election along with continued Brexit concerns.

France’s CAC 40 rallied 0.7% and Germany’s DAX 30 rose 0.5%. The Stoxx 600 Europe added 0.4% and the Belgium20 climbed 0.2%.

UK’s FTSE 100 was up 0.1%.

German July ZEW expectations of economic growth fell 8.6 to -24.7, weaker than expectations of -18.9.

UK May manufacturing production rose 0.4%, below forecasts of 0.7%. May industrial production fell 0.4%, weaker than expectations for a gain of 0.5%.

Asian markets were mixed despite slightly upbeat economic news out of China.

Japan’s Nikkei jumped 0.7% while China’s Shanghai and South Korea’s Kospi gained 0.4%.

Australia’s S&P/ASX 200 gave back 0.4% and Hong Kong’s Hang Seng slipped 0.02%.

China June CPI rose 1.9% year-over-year, matching forecasts. June PPI rose 4.7% year-over-year, stronger than expectations of 4.5%.

Food prices rose 0.3% from a year earlier after climbing 0.1% in May. Non-food prices grew 2.2% on year, on par with the on-year growth in May.

NFIB Small Business Optimism Index S. NFIB small business optimism index slipped 0.6 to 107.2 in June after climbing 3 to 107.8 in May.

The latter represented a 34-year peak and the second highest on record, topped only by the 108 reading from 1983.

Most components declined, including expectations of a better economy and higher sales, good time to expand, and increased capital spending.

However, plans to hirer edged up, as did positions not being able to fill, with the latter hitting 36%, and matches November 2000 as the highest in the history of the report going back to the early 1970’s.

The JOLTS report showed job openings dropped 202,000 to 6,638,000 in May after climbing 207,000 to a record high of 6,840,000 in April.

Expectations were for a print of 6,700,000. It’s represented the 5th consecutive reading over 6 million, and the 11th out of the last 14 months.

The current JOLTS rate was down to 4.3% from 4.4%. Meanwhile, hirings increased 173,000 to 5,754,000 versus the prior 95,000 bounce to 5,581,000.

The rate improved to 3.9% from 3.8%. Concurrently, quitters increased 212,000 to 3,561,000. The quit rate rose to 2.4% from 2.3%.

Chain Store Sales declined 0.7% to in the week ending July 7th. On a 12-month basis, the pace slowed to 3.1% from 3.6% year-over-year, and represented the slowest increase since April.

The July 4th holiday may have limited shopping with the dollar stores and discounters being the best performers.

Redbook Store Sales were up 5.2% for the year in the week ending July 7th.

Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) traded in a relatively tight range following the morning run to $122.13.

Lowered resistance at $122.25-$122.75 easily held with a close above $123 being a bullish signal for higher highs.

The midday fade to $121.81 held upper support at $121.75-$121.25 with a close below $121 and the 200-day moving average signaling a short-term top.

Market Analysis – The Spider Small-Cap 600 ETF (SLY) saw its 5 session win streak snapped despite trading to morning all-time high of $75.31.

Fresh resistance at $75-$75.50 held with continued closes above the latter getting $76.50-$77.50 in the mix.

Rising support is at $74.50-$74 with a move below the latter likely signaling a short-term top and a continued backtest towards $73-$72 and the 50-day moving average that remains in a strong uptrend since early May.

RSI is back in a slight downtrend after failing lower resistance at 65-70.

Support is at 55-50 on a break below 60.

The Dow Jones Transportation Average ($TRAN) closed lower for the 1st time in 4 sessions despite the intraday push to 10,721.

Near-term resistance at 10,700 and the 50-day moving average held with continues closes above 10,800 signaling additional momentum.

Support is at 10,600-10,550 with a move below the latter likely leading to a continued backtest towards 10,400 and the 200-day moving average.

RSI is trying to hold support at 50-45 with a move below the latter suggesting additional weakness.

Near-term resistance is at 55 and prior late May support.

A close above this level would be a bullish signal for higher highs.

 
Existing Position Update

Still holding NFLX and waiting for price action to trade higher before turning position into iron condor spread…patience is key right now.

Took profit on AMZN.

Looking for higher premium from TLT – let’s be patient.

Roger Scott