Despite a mixed closing on Tuesday, the Nasdaq achieved its 33rd new closing high of 2017. The heavy technology weighting of the index was responsible for its record close and is the reason for its outperforming the other indices.
While the Nasdaq was making new highs, the Dow Jones Industrial Average fell a fraction along with the S&P 500, but the Russell 2000 rose 0.05%. So far this year, the Nasdaq is up 15% and the S&P 500 and the Dow Jones Industrials have gained 7.2% and 6.2% respectively.
Yesterday, the S&P 500 lost ground, but seven of its 11 sectors either broke even (Utilities and Real Estate) or gained ground: Information Technology, Materials and Telecommunication Services advanced the most. But the overall index traded within a flat, ten-point range throughout the day.
Crude oil (WTI) futures broke a four-day winning streak, closing down 0.4% at $48.66 per barrel. The fall in crude was blamed on fears that OPEC’s cuts are failing to reduce the high inventories as fast as expected.
At the end of the session, the Dow Jones Industrial Average fell 2 points to close at 20,980, the S&P 500 was also off 2 at 2,401, the Nasdaq gained 20 at 6,170, and the Russell 2000 closed at 1,395 for a one-point gain. The NYSE’s primary exchange traded 792 million shares with a total of 3.4 billion shares, and the Nasdaq crossed 2 billion shares. On the Big Board, decliners outpaced advancers by 1.2-to-1, and on the Nasdaq, decliners led by a small margin. Blocks on the NYSE fell slightly compared to Monday.
When, in late November, the iShares Russell 2000 Index (ETF) (NYSEARCA:IWM) set a new high at $134, following the election of a new president, few thought that six months later $134 would still represent a significant support line. Since that day, the IWM has traded in a six-to-eight-point range with the minor exception of a break of the lines in March. That break was quickly reversed by twin CBR Buy signals from my internal indicator.
Conclusion: With the summer months almost upon us, and a tradition of more of the same ahead of us, traders should focus on the charted lines of support/resistance. The first important line of support is the 50-day moving average at $137 and the next, the line at $134. Resistance is at $140–$142. Volume and breadth could accompany a breakout or breakdown, providing evidence of a renewed direction (up), or a new direction (down). But wait for a signal since patience pays off in a sluggish market.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
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