U.S. markets continued their recent whipsaw action with the major indexes moving back and forth across the flat line several times on Thursday’s open.

Major support levels held on the pullback as Wall Street weighed on the outcome of upcoming tariffs that are scheduled to be implemented.

Although the brewing trade war and the impact on the economy and global trade remains to be seen, the market settled mildly higher.

Volatility remained heightened and is giving a neutral ready heading into the final trading day for the month of June.

The Dow climbed 0.4% despite testing a low of 23,997 while holding major support at 24,000 and closing below its 200-day moving average for the 3rd-straight session.

The S&P 500 added 0.6% following the morning pullback to 2,691 while holding and closing above crucial support at 2,700.

The Nasdaq gained 0.8% after tapping a low of 7,419 with support at 7,425-7,400 and the 50-day moving average holding.

The Russell 2000 slipped 0.3% after trading to a low of 1,630 with major support at 1,625-1,620 and the 50-day moving average standing firm.

A close back above 1,650 ahead of the weekend would be a slightly bullish signal.

Technology were up 1.2% and showed the most sector strength. Real Estate and Communication Services added 1%.

Energy and Utilities and Energy were the only sector laggards after giving back 0.1% and 0.04%.

Global Economy- European markets were weak across the board and ahead of a two-day European Union meeting in Brussels.

The summit comes on the heels of German Chancellor Angela Merkel’s deadline of Sunday to reach a European solution to the migration problem.

Germany’s DAX 30 sank 1.4% and France’s CAC 40 fell 1%. The Stoxx 600 Europe was lower by 0.8% and the Belgium20 climbed 0.7%. UK’s FTSE 100 dipped 0.1%.

The ECB said its balance of risks for global activity and trade in the short term has worsened recently, with risks remaining skewed to the downside in the medium term.

They went on to add the implementation of higher trade tariffs and the possibility of wider protectionist measures represent a key risk.

Eurozone June economic confidence slipped 0.2 to 112.3, better than expectations for a drop of 0.5 to 112.

The June business climate indicator declined 0.05 to 1.39, weaker than expectations of 1.40.

German July GfK consumer confidence was flat at 10.7, topping forecasts for a print of 10.6.

Asian markets settle mixed as global trade concerns lingered in overseas trading.

Hong Kong’s Hang Seng rose 0.5% and Australia’s S&P/ASX 200 advanced 0.3%. Japan’s Nikkei tanked 1.4% and South Korea’s Kospi sank 1.2%.

China’s Shanghai dropped 1%.

Japan May retail sales fell 1.7%, weaker than expectations for a 0.8% decline.

Initial Jobless Claims rose 9,000 to 227,000 in the week ending June 23rd, above estimates for 220,000. This nudged the 4-week moving average up to 222,000 from 221,000.

Continuing claims dropped 21,000 to 1,705,000 in the June 16th week.

First quarter GDP growth was revised down to 2% versus the 2.2% pace in the second report and the 2.3% growth rate estimated in the advance data.

Bloomberg Consumer Comfort Index rose 0.8 points to 57.3 in the June 24th week, after increasing 0.7 ticks to 56.5 previously, and represented the third-straight weekly gain.

More importantly, the index is just shy of the 58.1 print from the April 15th week, which was the strongest since 2001, and is defying worries over trade.

The current outlook on the economy improved to 58 from 57.3 and is the best since March. The buying climate gauge rose to 49.9 from 49.3 and is at a 9-week peak.

June Kansas Fed Manufacturing Index checked in at 28.

Market Sentiment – Fed Chair Jerome Powell wants the real economy to guide the Fed according and is accordingly pushing the envelope on just how low the jobless rate can be driven before sparking inflation.

While sticking to his gradualism on rate hikes, Powell’s willing to see remaining slack be reduced in the jobs market.

He said there is hope that can lead to a rebound in productivity as workers become more fully utilized, but that also requires improvements in skill levels.

St. Louis Fed James Bullard said market expectations are below the Fed’s inflation target for coming years, which is a sign the Fed is in good shape to either slow or halt rate increases.

He argues that the best bet is that the U.S. will remain in a low inflation, low growth regime for at least a couple more years.

Bullard remains skeptical that the current trade negotiations will lead to any meaningful change, leaving the same trade arrangements as currently exist more or less.

However, he’s bracing for a bumpy ride as the negotiations play out.

Bullard went on to say it’s possible upside to trade tension would be if it leads countries to drop barriers and boost free trade globally.

He said the yield curve inversion is a key near-term risk for the Fed, which could cause it to slow rate increases until its clear inflation pressure or long-term yields are rising.

The iShares 20+ Year Treasury Bond ETF (TLT) traded to an intraday high of $122.25 with lower resistance at $122.25-$122.50 holding.

Support remains at $121.50-$121 and the 200-day moving average.

Market Analysis – The Russell 3000 Index ($RUA) is trying to find a near-term bottom with Thursday’s low tapping 1,603. Late May support at 1,600-1,590 held with a move below the latter being a bearish development.

The rebound to 1,622 afterwards and close back above the 50-day moving average was a slightly bullish development.

Continued closes above near-term resistance at 1,620-1,625 would be a better signal a near-term bottom might be in.

The mentioned earlier this month the index was showing signs of topping out and will need to recover the 1,640-1,650 area to regain this week’s lost momentum.

RSI is back in a slight uptrend with resistance at 45-50.

A move above the latter would signal continued strength. Support is at 40 with risk to 35-30 and February/ March lows on a move below this level.

The Materials Select Sector (XLB) has been in a rather tight trading range over the past 6 sessions despite the run to $57.90.

Resistance at $58.25-$58.75 and the 50/200-day moving averages easily held. Continued closes above $59 would be a bullish development.

A death cross has formed with the 50-day MA falling below the 200-day MA and typically leads to lower lows. Thursday’s pullback reached a low of $57.26.

A move below $57 will likely lead towards a continued backtest to $56.50-$56.

RSI is holding near-term support at 40 with risk to 35-30 and 2018 lows on a close below this level. Resistance is at 45-50.

All the best,