Dr. Duke's Blog

Not much was going on in the markets today. SPX closed down one dollar at $1960, but traded throughout the day in a very narrow six dollar range. A little more action was happening with the small caps with RUT trading down to $1185, before recovering to close up $3 at $1193. The NASDAQ composite had solidly broken out to new highs last week and continued that push higher today, gaining $10 to close at $4408, another all time high. Can NASDAQ pull the blue chips higher? Volatility is roughly flat with a rise of three tenths of a point on the VIX at 11.6%. Trading volume returned to normal after Friday's activity associated with the Russell rebalancing. Trading volume in the S&P 500 came in at 1.8 billion, a half million shares below the 50 dma. Trading declined 15% on the NYSE and dropped 31% on NASDAQ.

The Chicago PMI may have thrown a little cold water on the market today, coming in at 62.6 for June, down from last month's 65.5. Pending home sales spiked up 6.1% in May, a big improvement from April's 0.5% increase. Economic data abound the rest of the week with the ISM manufacturing and services indices, the ADP private employment report, construction spending, factory orders, and, finally, the big daddy of economic reports: non-farm payrolls on Thursday morning (the exchanges are closed on Friday).

For now, it appears the bulls and bears are pretty evenly matched with SPX trading largely sideways for the past couple of weeks. Many analysts have been expecting a pullback or correction, but so far, no amount of bad news has been able to give the bears the upper hand. All we can do is trade what we see.