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Dow inching red, but NASDAQ holding gains

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The markets have developed somewhat of a mixed session today as the Dow Industrials (INDU) have just inched into negative territory after trading up as much as 76 points earlier in the session. Dow breadth is about slightly positive with 18 gainers and 12 losers.

The NASDAQ Composite (COMPX) is holding onto a 15 point gain at 1,842, but did find some sellers at it still trending lower 50- day moving average at 1,853. Tech gains are found in the Networking Index (NWX.X) 241 +2.5%, Software (GSO.X) 165 +2% and Semiconductor (SOX.X) +2%.

Yesterday, the lesser technology exposed S&P 500 (SPX.X) was able to break above its rounding lower 200-day moving average at 1,142, and holds above this key longer-term moving average today with a gain of 3 points (+0.25%) at 1,147. Technical resistance has been firm at the 1,175 level since early December and this is the level that many feel needs to be broken for stocks to really put in a truly longer-term bullish move.

Sector weakness today is rather limited with the Biotechnology Index (BTK.X) 500 trading down 1% and the Gold/Silver Index (XAU.X) 71.31 trading off 1.2%.

Quick recap of today's economic data

Michigan Consumer Sentiment was released earlier than the expected 10:00 AM EST, and sentiment rose to a reading of 95.7, which is higher than the estimate for 94.3.

I've been monitoring the S&P Retail Index (RLX.X) 955.57 -0.4% to see if this sector could get above a retracement resistance level near 960, but hasn't been able to sustain a move above that level today. This isn't overly concerning, but may hint that confidence number has been factored into market right now.

The Chicago PMI rose to 55.7% in March, which was better than the 54% consensus. This indicates that the manufacturing sectors are recovering at a pretty good clip. The question remains "is this inventory re-building, or sustainable longer-term trend?"

Treasuries did see some selling right after the PMI data was released, with the 10-year YIELD jumping to a session high of 5.448%, but unable to get above last week's high YIELD levels of 5.452%. Today we noted that MACD on the daily interval chart for this benchmark YIELD was rounding lower from a higher level and a near-term round of buying might be seen in this bond (buying in bond would have price rising and YIELD falling).

10-year YIELD Chart - Daily Interval

This morning's pre-market jobless data that came in a little weaker than expected may have offset some more extreme bearishness that could have taken place in Treasuries today. The YIELD on the 10-year did jump higher after the PMI data was released. YIELD support should be firm at the 5.0% level. I've colored the now upward trend at lower regression with "red" to reflect price resistance.

Jeff Bailey
Senior Market Technician
Option Investor

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