On Monday, too many uncertainties had investors on the sidelines.
Some seemed concerned over the results of the Group of 20 nations meeting during the weekend. Their goal was to find common ground on trade issues, but in retrospect the results appeared flat. Others were concerned over the president’s ability to pass a replacement for “Obamacare,” and others were disturbed over Russia’s apparent ability to disturb our election process, and how this will impact our trade policies.
The Dow Jones Industrial Average fell less than 0.1%, the S&P 500 fell 0.2%, the Nasdaq gained less than 0.1%, and the Russell 2000 fell 0.5%. Sectors that did well last week, like utilities, became targets for profit-taking. The utility sector of the S&P 500 Index fell 0.7%. Financial stocks lost 0.9%. But the technology sector gained 0.1%, and materials rose 0.4%.
At the close, the Dow Jones Industrial Average fell 9 points, closing at 20,906, the S&P 500 lost 5 at 2,373, the Nasdaq gained a half point at 5,902, and the Russell 2000 closed at 1,384 for a loss of 7 points. The NYSE’s primary exchange traded 752 million shares with total volume of 3 billion shares, and the Nasdaq crossed 1.7 billion shares. On the Big Board, decliners outpaced advancers by 1.4-to-1, and on the Nasdaq, decliners led by 1.6- to-1. Blocks on the NYSE fell to 6,235 from 8,966 on “Quadruple Witching” Friday.
Despite reluctance on the part of major buyers to support the big-caps with high volume, the small-caps are making a push against the resistance line at $138 on the iShares Russell 2000 Index ETF (NYSEARCA:IWM). The well-established range of $134 to $138 has been with us since November but was exceeded in February, only to become the victim of profit-taking in March. However, the bottom at $134 held, and the subsequent rally pierced the 50-day moving average last Wednesday.
Conclusion: The small-caps are the place for traders to skim a few points from a bouncing group of technology infants. And if the IWM can close above $138, we may see a new high in the Russell 2000.
For those who are looking for a trade: The high-tech, small- and mid-caps seem best suited for a breakout. For example, consider our Trade of the Day, Integrated Device Technology Inc (NASDAQ:IDTI), as a stock with solid fundamentals, and a chart that supports a drive to a new high.
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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