U.S. markets opened higher before giving up gains shortly afterwards as they were unable to establish any early momentum. However, buyers re-emerged late in the afternoon and pushed the market to its best levels just ahead of the closing bell.

Volatility relaxed but remains slightly elevated ahead of Friday’s jobs report.

The Dow gained 1.7% after trading to a high of 24,044 while holding the 24,000 level into the closing bell.

The S&P 500 advanced 1.3% after making a run to 2,619 to close back above the 2,600 level and its 200-day moving averages.

The Russell 2000 rallied 1.3% after reaching a peak of 1,519 to close above the 1,500 level.The Nasdaq was up 1% after testing an intraday high of 6,963 while closing below the 7,000 level for the second-straight session.

Energy jumped 2.1% to lead sector strength while Health Care rose 1.5%. Financial, Industrials and Material jumped 1.4%. There were no sector laggards.

Global Economy – European markets settled lower across the board to start the week following Monday’s holiday. Germany’s DAX 30 gave back 0.8% and the Belgium20 dropped 0.7%. The Stoxx Europe lost 0.5% while UK’s FTSE 100 fell 0.4%. France’s CAC 40 was down 0.3%.

The final Eurozone manufacturing PMI for March was inline with the flash reading at 56.6.

Asian markets closed mostly lower aside from Hong Kong’s Hang Seng which was up for the second-straight session after rising 0.3%. China’s Shanghai sank 0.9% and Japan’s Nikkei pulled back 0.5%.

South Korea’s Kospi and Australia’s S&P/ASX 200 slipped 0.1%.

The Australian central bank left its key interest rate unchanged at a record low of 1.5% for the 20th straight month, which was in-line with forecasts.

Bank of Japan Governor Kuroda told parliament that the Bank of Japan is internally discussing about how to begin exiting from its stimulus program but that it is too early to talk about details in public.

Redbook Store Sales were up 4.4% for the year in the week ending 3/31.

U.S. chain store sales declined 1.9% to 116.7 for the week ending 3/31, after jumping 4.3% in the prior week.

Market Sentiment – New York Fed names John Williams to succeed Bill Dudley to head the bank. Williams has been president of the San Francisco Fed and will take over the position on June 18th.

The New York president votes at every policy meeting and is also the vice chairman of the FOMC. The choice maintains the continuity of the FOMC and its gradualist posture after Janet Yellen’s departure, and the ascendance of Governor Powell to that post.

Federal Reserve Bank of Minneapolis President Neel Kashkari said it’s not clear how tight the labor market is.

He said he was surprised at the extent that the tax cut lifted confidence, but he’s not sure if the legislation will boost investment or long term growth.

Kashkari went on to say analysts are probably pretty close to neutral rates and added from his view, it isn’t clear analysts need to raise rates much more to try to even things out in the economy.

He added the Fed is much more focused on the real economy than stock market volatility.

The iShares 20+ Year Treasury Bond ETF (TLT) fell for the first time in five sessions following the backtest to $120.83. Support at $120.50-$120 held with risk to $119.50-$119 and the 50-day moving average on a move below the latter.

Lowered resistance is at $121-$121.50.

Market Analysis – The Russell 2000 ETF (IWM) rebounded from Monday’s drubbing after testing an intraday high of $150.60. Near-term resistance at $150.50-$151 held with additional hurdles at $152-$152.50.

Early March support is at $148.50-$148 with a move below the latter being a bearish development with risk to $147.25-$147 and the 200-day moving average.

RSI is back in a slight uptrend with resistance at 45-50. Support is at 40 with a close below this level signaling additional weakness.

The Spider Gold Shares (GLD) remain choppy following today’s backtest to $126.01. Support at $126-$125.75 and the the 50-day moving average held with risk to $125-$124.75 on a close below the latter.

Near-term resistance is at $126.75-$127.

RSI is trying to hold support at 50 with a close above this level leading to a possible retest to 40. Resistance is at 55-60.

All the best,
Roger Scott