It was a low volume quiet day for stocks and despite still not being able to make new highs, the bulls were able to keep the bears at bay for another day. The Dow closed up 43-points and we saw modest gains across the board. The I-fund lagged after the dollar puts in a n overdue positive day.
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We seem to be back in the mode of the bulls not being overly aggressive near the old highs, while the bears keep their distance, despite the terrorist attack in the UK.
Indices like the lagging Transports and small caps have now run up to some serious resistance and may be at make or break levels for those market leaders.
The SPY (S&P 500 / C-fund) reached up to the May 15th all -time closing high before backing off a bit and closing just below a new closing high. That 240 level on the SPY (2400 on the S&P 500) continues to hold off the bulls giving the bears another chance to make their move, but so far they have not stepped up, despite another geopolitical event that could have sent stocks reeling.
The DWCPF (S-fund) tried to break above the descending resistance line yesterday, but came up just short of closing above it. It did retest the 50-day EMA and held while creating a positive reversal day, so today action will be interesting as the bulls show some resilience, but an unwillingness to press through resistance.
The Dow Transportation Index filled its small open gap which happened to be right at the bottom of that large bear flag and the 20-day EMA. That is some tough overhead resistance so if the bulls want to remain in charge, they have a big job ahead of them this week. Above 9100+ would be the safe zone for this index.
The EFA (EAFE Index / I-fund) managed to stay close to break-even despite an overdue rally in the dollar.
The UUP rallied 0.44% putting some pressure on the I-fund. There are still 4 open gaps on this chart, but the UUP will have to make it back into the falling wedge formation that it broke down from last week.
The price of oil has been rallying since the big reversal on May 5. There will be a resistance test near 53 but it has already made it back above the 50-day EMA as we move into the peak driving season of the year.
The AGG (Bonds / F-fund) pulled back, as did gold, so the safety trades were off yesterday. We still see the open gaps on this chart and they could be the short-term downside targets, but there is also a bull flag forming so that makes it less likely that the gap near 108.50 will get filled in the near term.
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