A Friday Rip?

'We need more expert analysis than 'the stock market was down, because it wasn't up.''

I think after yesterdays impressive recovery it was inevitable that a shallow pullback was necessary and today that is exactly what we received.  The market after all must go down in order to wave back up.  However, I believe that the market is setting up for a Friday rip higher tomorrow.  I said earlier in the week that it was very likely that a new all time high will come in the S&P.  All attempts at selling have been bought, and despite the ongoing noise of Greece, the IMF and the ECB, I believe that tomorrow is when we will see a move higher again.  Frankly it is about time the market decided to go in one direction or another for a few days in a row.  Perhaps that time is now as the path of least resistance is up…

Market News:
U.S. stocks traded mostly lower on Thursday as a lack of resolution on Greece debt talks and declining transports weighed on investor sentiment.

The Dow transports resumed their decline, falling more than 1 percent. U.S. stocks have alternated between losses and gains in the last three trading days.
Christine Lagare, the head of the IMF, told a German newspaper that a Greek exit from the euro zone was possible but that this would probably not herald the end of the euro currency.

On Wednesday, both U.S. and European equities rallied after Greece said it had stated crafting a “staff level agreement” with its international bailout supervisors.

However, European officials rebuked the claims on Thursday, saying there was some way to go before any agreement could be drawn up and that they were surprised by the upbeat sentiment from Greece.
The Greek government’s spokesman still said a deal should be reached by Sunday, Reuters reported.

Earlier, investors remained cautious following China stocks plunging 6.5 percent on Thursday, with traders citing the tightening of marginal lending rules as an explanation. Despite the selloff, the Shanghai Composite is still up more than 40 percent year-to-date.

Meanwhile, U.S. officials were at the Group of Seven (G-7) meeting of finance ministers and central bank chiefs in Dresden, Germany, on Thursday, which will continue until Friday. Greece is on the agenda, as well as reviving global growth.

Weekly initial jobless claims came in at 282,000, up slightly from last week’s 274,000 read.

Pending home sales rose 3.4 percent in April, their highest in 9 years.

On Friday, there will be the second estimate of first-quarter economic growth.

San Francisco Fed President John Williams said in Singapore on Thursday he expects the U.S. economy to grow about 2 percent and unemployment to drift below 5 percent this year, Reuters reported. Williams cautioned that more economic data needs to be collected before a decision on interest rates is made.

Friday:

8:30 a.m.: Real GDP Q1 (second)

9:45 a.m.: Chicago PMI

10 a.m.: Consumer sentiment


The Algos Are In Control

When it comes to investing, Dave has got to learn to lighten up.

This is a very tough market to trade unless you are very very short term.  As a position trader or swing trader, the trend is my friend.  But the trends have been few and far between this year so far.  In fact the only trend of any note took place in February.

The market refuses to sell off, but also refuses to rally too hard either.  We are in a low volume trading pool where the algorithms are picking off the stops to the upside and the downside.  When there is lower volume it is easier for the machines to pick of the traders traditional stop placements at previous lows and highs.  Call me a conspiracist, but that is my theory.  Hence the reason for these wide ranges, multiple “v” bottoms and extreme volatility.

So what’s next?  I expect the market to have another go at climbing higher again this week, possibly testing or going through the previous all time high in the S&P, not just in the Nasdaq.  The market is still vulnerable to bad news, but it is my belief that it wants now to go higher again.   Although, I do not think we will see prices above 2150 on the ES E-Mini S&P 500 Futures before we see a multi-day sell-off, possibly taking us down into oversold territory.

I much prefer to trade bottoms after a sell-off, I do not like buying breakouts, and although my portfolio survived yesterdays dip, I do not think we are about to go screaming higher.  Therefore, my hope is that we do indeed print out a new all time high on the S&P by Friday and I get the chance to close out my modest profits before we see rather more selling than we have for a couple of months.  This slow grind higher followed by one day sell-offs is getting tired!

Market News:

U.S. stocks closed higher on Wednesday, recovering from Tuesday’s sell-off, as encouraging Greece headlines boosted investor sentiment amid a slight pause in the dollar and yield climb.

The Nasdaq jumped nearly 1.5 percent to end above its previous closing high of 5,092.09. The index lost 1.1 percent on Tuesday.

The Dow Jones industrial average closed up about 120 points. The blue chip index fell as much as 242 points on Tuesday before closing 190 points lower.

European stocks opened higher and rallied on initially encouraging reports out of Greece. The German DAX closed up more than 1 percent, while Greece’s ATHEX Composite ended 3.5 percent higher.

Greek Prime Minister Alexis Tsipras said on Wednesday the negotiations are on the “final stretch” towards a positive deal, Reuters reported. A European official said in a Bloomberg report that “we are still working toward an agreement” and that no accord was reached.

Separately, the European Central Bank left the ceiling on emergency funding for Greek banks unchanged for the first time since February, Reuters said.

Later in the day, German Finance Minister Wolfgang Schaeuble said there was not much progress in the Greek debt talks and he was surprised by the upbeat tone from some Greek government officials, according to an ARD television interview cited by Reuters.

Marc Chandler, foreign exchange strategist at Brown Brothers Harriman, said the dollar moved on Greek headlines but he is still suspicious that much progress was made.

Athens must make a 300 million euro payment to the International Monetary Fund on June 5, ahead of several other payments due to the IMF later in the month, for a total of 1.6 billion euros.

European stock markets traded higher Wednesday despite concerns over Greece’s deteriorating financial situation.

U.S. Federal Reserve Vice Chairman Stanley Fischer said Tuesday that markets should not be surprised by the timing or pace of rate hikes.

Thursday:

2:20 a.m.: San Francisco Fed President John Williams in Singapore

8:30 a.m.: Initial claims

10 a.m.: Pending home sales

1 p.m.: $29 billion 7-year note auction

2:45 p.m.: Minnesota Fed President Narayana Kocherlakota


Which Way is Next?

Road signs - 'One way' and 'Or another'.

The S&P had a nice push up today, but it stalled near the previous all time high.  It was actually pretty impressive that it managed to get that high.  At 6pm yesterday the S&P 500 Futures did indeed pullback to a low of 2115, (I had mentioned yesterday that I thought that there may be a pullback to that region), but it had recovered enough by market open to be just below yesterdays close in the SPX index itself.  This caused a pretty strong V like bottom in the futures and I think we will see higher prices again tomorrow.  It wants to take out that high, not just the closing high as it did today.

The wild card is Janet Yellen’s speech.  Last time she spoke her soundbite of the markets being a little high caused an intra-day sell-off.  Hopefully she will not spook the market this time.  But even if she does it will be short lived.  I really feel this market has some more legs to the upside, which does seem a little counter intuitive, given the lack of volume or strong rally through the highs.  But it’s just a gut feeling.  I will of course follow my trading plan no matter if it goes one way or the other like the cartoon above.  As you can only win if you have a plan and the discipline to follow it.

Market News:

U.S. stocks closed modestly higher on Thursday, with the Nasdaq outperforming, as investors eyed slightly lower bond yields and mostly shook off the morning’s mixed economic data.

The S&P 500 ended mildly higher, above its previous record close of 2,129.20 to set its 10th closing high for the year.
The Nasdaq failed to top its closing high of 5.092, despite Apple gaining 1 percent and Amazon closing up nearly 2 percent. The Dow Jones industrial average ended just 0.34 points higher after repeatedly dipping into negative territory.

Markets mostly shrugged off mixed morning economic reports. The Consumer Price Index, a key indicator for inflation, is due Friday morning.

Existing home sales for April fell 3.3 percent, missing an expected 1 percent gain to 5.24 million units. Earlier in the week, reports showed home builder sentiment fell in May, but housing starts for April came in much better than expected.

Manufacturing PMI came in at 53.8 for May, below expectations of 54.5. The initial read showed slowing growth for the second straight month, with new orders increasing at their slowest pace since January last year, financial research firm Markit said.

The May U.S. Philadelphia Fed Index showed a gain of 6.7.

The Conference Board’s leading indicator index, which forecasts future economic activity, showed a gain of 0.7 percent in April. The index was expected to register the 15th consecutive increase, given a decline in initial unemployment claims.

Art Hogan, chief market strategist at Wunderlich Securities, said the leading indicators was encouraging for stocks. “The second quarter is looking stronger,” he said.

Weekly jobless claims came in at 274,000, above expectations of an increase to 271,000 from the prior week’s 264,000. The 4-week moving average remains the lowest since April 2000.

Fed Chair Janet Yellen is scheduled to speak on Friday at the Greater Providence Chamber of Commerce Economic Outlook luncheon at 1 p.m. She is not expected to take questions.

U.S. Federal Reserve Vice Chair Stanley Fischer said on Thursday at a forum that the euro zone crisis had made the monetary union stronger and proved that the European Central Bank has the ability to carry out effective policy in the region.

Friday:

Earnings: Campbell Soup, Deere, Foot Locker, Ann, Mentor Graphics, Krispy Kreme

08:30 a.m.: CPI

09:45 a.m. Manufacturing PMI

01:00 p.m. Fed Chair Janet Yellen at the Greater Providence Chamber of Commerce on economic outlook


YOYO Anyone?

yoyo

Up down, up down, up down…What a yoyo kind of day.  I did not expect such a spike after the Fed minutes release.  It was almost certain that a rate hike was never going to happen at the June meeting considering the last GDP reading.  However, that spike higher in equities did not last very long and we are back to flat again in the markets for a second day in a row.

Janet Yellen is speaking on Friday and I think traders will be more focused on that than the minutes of a meeting held weeks ago.

Now that there has been 2 days of uncertainty, and the fact that there has been only a very shallow dip so far from the high, we are either going to rally tomorrow or see a decent pullback down to 2105 – 2115 in the S&P.  I believe that there is more upside ahead, but we may have to wait for Ms Yellen to spark the march higher.

Market News:

U.S. stocks traded sideways on Wednesday following a record close on the Dow, failing to shake off an initially tepid response to the Fed meeting minutes.

The major indices rose modestly before pulling back, with the S&P 500 setting a new intraday high and the Nasdaq briefly trading above its record close.

The Fed minutes showed policymakers mostly brushed aside the wobbly start the U.S. economy has had in 2015, attributing the lack of growth to “transitory” factors that will abate soon. Only a few policymakers supported a June rate hike.

Investors are also looking ahead to a Friday speech from Fed chief Janet Yellen for possible new clues on when the central bank may start raising interest rates.

Art Hogan, chief market strategist at Wunderlich Securities, said the speech would probably be “more provocative” than the minutes since Yellen’s remarks will account for economic reports since the April Fed meeting.

Yellen is scheduled to speak Friday at the Greater Providence Chamber of Commerce Economic Outlook Luncheon at 1 p.m. She is not expected to take questions.

The Federal Reserve Open Market Committee was scheduled to release the minutes from its April meeting at 2 p.m. The statement from that month removed all calendar references to the timing of a short-term interest rate hike.

Chicago Fed President Charles Evans said in Munich on Wednesday that a rate hike is not likely to be appropriate until early 2016, Reuters reported.

Earlier, stocks fluctuated around the flatline. The Dow transports briefly fell more than 1.5 percent, hitting a 7-month low, as airline stocks declined. Southwest dipped more than 8.5 percent to lead laggards after the company said it expects a decline in passenger revenue per available seat mile for the quarter.
The Dow Jones industrial average closed at a record for the second day in a row on Tuesday, ending below and intraday high of 18,351.36 set earlier that session. The S&P ended mildly lower after closing at a record on Monday.

Authorities on Wednesday fined JPMorgan Chase, Citigroup, Barclay’s, RBS and UBS a total of more than $5.5 billion for rigging rates, the U.S. Department of Justice said on Wednesday. The U.S. Federal Reserve fined all five banks and also Bank of America.

European equities managed to close higher on Wednesday, but struggled to hold momentum from the previous day’s strong gains as concerns about Greece weighed.

The Greek government’s parliamentary speaker said on Wednesday that Athens will not make the June 5 payment unless it has reached a deal with its creditors, Reuters reported.

The European Central Bank raised its emergency funding cap for Greek banks by 200 million euros to 80.2 billion euros ($89.1 billion), Dow Jones reported.

Thursday:

Earnings: Hewlett-Packard, Intuit, Williams-Sonoma, Gap, Trina Solar, Toro, The Buckle, Ross Stores, Aeropostale, Aruba Networks, Brocade

08:30 a.m.: Initial claims

10:00 a.m.: Existing home sales

01:30 p.m. Fed Vice Chairman Stanley Fischer on economic outlook at ECB forum

07:00 p.m.: San Francisco Fed President John Williams on impact of form


Simple Pleasures…and All Time Highs

'I enjoy the simple pleasures, the setting sun, a glass of wine, the Dow hitting an all time high.'

I like today’s cartoon on simple pleasures, however, joking aside, trading and investing is not so simple.  As we hit another all time high today, I was pleased to be still long the market.  But just how much further up it will go is anybody’s guess.  I sense that there will be a correction of some sort coming this year.  I just don’t know when.

Of course, I always welcome corrections as they are just great opportunities to sell near a top and buy after the fall.  So bring it on Mr Market, well actually, just let me lock in a decent profit first on these trades.  They are off to a good start.

Hopefully, we will see further short covering by mid week, as there must be some significant shorts around these levels.  Should the market continue to grind higher, at some point they will capitulate and send us on another 1% rally on the indexes.

I have a few splits in the ETF’s I trade to contend with over the next few days to make life a little more interesting.

Market News:

U.S. stocks closed higher on Monday, with the Dow Jones industrial average and S&P 500 ending at new records, as investors shook off earlier concerns about Greek debt and a renewed rise in bond yields.

The Dow Jones industrial average closed above its previous closing and intraday high of 18,288.63. The S&P 500 closed at a record for the third day in a row, passing its closing high set on Friday and topping its intraday high of 2,125.92.

The Nasdaq Composite ended 20 points within its closing record, outperforming the major indices with the iShares Nasdaq Biotechnology ETF (IBB) gaining 1.3 percent.

Speaking early Monday at the Swedish capital, Chicago Fed President Charles Evans said the U.S. Federal Reserve could look at a rate hike in June if the economy is strong enough, Reuters said. His speech argued for rates to start rising in early 2016.

Evans told reporters if the Federal Open Market Committee had confidence that inflation was going to move up and that first quarter economic softness was temporary, “you could imagine a case being made for a rate increase in June.”

Most of the second-quarter data reports have showed a slower-than-expected rebound from a weak first quarter.

The only data out Monday was the National Association of Home Builders’ survey, which showed builder confidence slipped two points in May, missing expectations of a slight gain. Housing starts and existing home sales come out later in the week, along with the Federal Open Market Committee’s meeting minutes.

In Europe, stocks closed higher amid abating fears that Greece is on the verge of bankruptcy.

Earlier, U.S. stocks opened mildly lower as European equities dipped on news that a Greece government spokesman said on Monday that authorities will pay public-sector wages and pensions in May, but needs a deal with creditors by the end of the month.

Greece proposed to its international lenders that Europe’s bailout fund pay back maturing Greek government bonds held by the European Central Bank as a way to overcome a funding crunch, Finance Minister Yanis Varoufakis said on Monday in a Reuters report. Athens could then pay the European Stability Mechanism (ESM), at a later date, Varoufakis told the annual assembly of the Greek Industrial Federation.

National officials in Athens also sent a letter to the International Monetary Fund that showed Greece came close to defaulting on a 750 million euro ($860 million) repayment last week, local newspaper Kathimerini and the Financial Times reported.

Tuesday:

Earnings: Wal-Mart, Home Depot, TJX, Dick’s Sporting Goods, Medtronic, Autodesk, Red Robin Gourmet Burgers, Vodafone, Analog Devices

08:30 a.m.: Housing starts


Will the Market Get Altitude Sickness?

'The stock market closed early today due to an outbreak of 'altitude sickness'.'

I was filled today at the open, so nice trades so far.  But I don’t think the market is done yet.  Not this close to all time highs.  All the selling that came last week bewildered chartists, as it was such a deep sell off that could easily have broken the bulls back.  But alas, as I had mentioned yesterday, I firmly believe that all time highs will be delivered very soon.  How high it goes is anybody’s guess, but I would think we will be looking at 2130 to 2135 at least before a significant pull back will come.  Just an estimate, so let’s see.

That being said, it may have to wait till Monday or Tuesday now, as we will be due a small pullback tomorrow after today’s big rally.  But i am expecting it to be relatively shallow.

Market News:

U.S. stocks closed one percent higher on Thursday as investors cheered further weakness in the dollar and calmer bond markets, amid mixed economic data.

The S&P 500 set a new closing record with information technology jumping 1.7 percent to lead all 10 sectors higher.

The Dow Jones industrial average came within 50 points of its record high after gaining more than 150 points in morning trades, with Apple and Microsoft leading the advancers. JPMorgan Chase hit a 15-year high.

The Nasdaq rose more than 1 percent to within 50 points of its record close, boosted by tech and biotechnology stocks.

Analysts attributed gains to several factors, including further decline in the U.S. dollar and lower bond yields. Traders also noted some short covering ahead of options expiration on Friday.

Weekly jobless claims came in at 264,000, a touch below last week’s reading and below expectations for a slight increase. The initial filings for unemployment benefits per week remain near 15-year lows.

The producer price index for April fell 0.4 percent, with the core figure down 0.2 percent, missing expectations for a slight gain. The monthly measure of input costs is a secondary factor in determining the rate of change in prices, after the consumer price index.

The Federal Reserve will eye both the employment situation and inflation for signs the economy is ready for an interest rate hike. Consensus is for a rate hike in September or later in the year, but central bank policymakers have not ruled out a June liftoff.

European equities ended higher, boosted by gains in steel producers the European Union’s decision to impose a duty on imports of electrical steel.

Greece on Thursday offered a concession to its international lenders by pushing ahead with the sale of its biggest port, Piraeus, Reuters said.

Friday:

Earnings: Nippon Telegraph, Petrobras

8:30 am: Empire State survey

9:15 am: Industrial production

10:00 am: Consumer sentiment

4:00 pm: TIC data

News Source: CNBC


The Roller Coaster Turns Down Again

stock-market-roller-coaster

Seems that today the expected pullback came.  Considering the S&P 500 had posted over 60 points in 2 days last week it was highly probable that the bears would take temporary charge and allow for profit taking.  This has been quite the roller coaster ride that, frankly, I am glad to be out of.

Should it break out tomorrow I will be filled on some trades, but I doubt that the pullback is over.

Greece is a wild card, and it is coming to a head.  There is pressure on Angela Merkel to cut them loose in Germany and the IMF is working on contingency plans should they default.

All in all, it’s a highly volatile environment that i would prefer to buy into after a considerable sell off.  But as always, I will follow my rules and my trading plan that has served me so well in the past.

Market News:

U.S. stocks closed lower on Monday, giving back some of the strong rally on Friday’s jobs report, as investors eyed gains in bond yields and awaited the week’s data releases.

No major economic news or earnings reports are expected Monday. Retail sales and industrial production figures come out later in the week.

The April employment report showed continued economic growth, but not strong enough for most analysts to expect an immediate rate hike.

San Francisco Federal Reserve President John Williams said on CNBC’s “Squawk on the Street” that the employment report showed “good momentum” for the rest of the year. He also expects GDP to rebound from a weak first quarter.

Greece paid about 750 million euros to the International Monetary Fund on Monday, a day before it was due, two Greek finance ministry officials told Reuters on Monday.

The Eurogroup of regional finance ministers met on Monday and said in an official statement that it welcomed progress achieved in Greece’s negotiations with its creditors for a cash-for-reform deal but said more work is needed to bridge differences holding up a comprehensive agreement.

European equities were mixed Monday, pausing after a rally on Friday, and overlooking the news that China has cut interest rates for the third time in six months.

The People’s Bank of China (PBOC) announced the cut in its benchmark lending rate and one-year deposit rates by 25 basis points on Sunday, as growth in the Asian economic giant slowed to levels not seen since the global financial crisis.

Tuesday:

Earnings: Allianz, EnCana, McKesson, Zillow, Voxeljet, Vivint Solar, International Flavors and Fragrances

9:00 am: NFIB small business survey

10:00 am: JOLTs

12:45 pm: San Francisco Fed’s Williams on economic outlook

1:00 pm: $24 billion three-year note auction

2:00 pm: Federal budget


The Mother Of All Short Squeezes

Sell my shorts

Yet another extraordinary move higher leaving everyone thoroughly puzzled.  There must have been very few traders expecting a new All Time high after the breakdown earlier in the week.  It almost broke the high today!

I cannot even form an opinion as to where the trend is going.  But odds are certainly back with a new high next week.  I had been so convinced we were going to see one before the heavy selling came creating a new low in the S&P 500.  This is a very strange market.

My system doesn’t utilize shorting, but I imagine just about every man and his dog was short the market this week, so this is one heck of a short squeeze.  For those that are unfamiliar with the term.  There have been many traders clearly fueling this rally as they capitulate under the pressure from the bulls to buy buy buy and cover their short positions. (short positions only make money when the market goes down).  Short covering can actually boost the market higher.  You often see a sharp burst on a minute chart when a new high is broken as that is where all the buy stops are.  Just about all the buy stops where hunted and gobbled up today.

Where it goes next is anyone’s guess…I am clueless, and I don’t mind saying so. Cash is a position.

Market News:

U.S. stocks closed sharply higher on Friday as investors cheered a jobs report that showed economic growth but not enough, in the eyes of most, to warrant central bank tightening immediately.

Analysts called the April employment figures a “Goldilocks” report because it was just right for gains in stocks. The Dow Jones industrial average held morning gains of 250 points, briefly adding more than 275 points.

The major averages advanced towards records but failed to break them. After a volatile week of trading, the Dow and S&P 500 clung to mild gains for the week, while the Nasdaq was down 0.04 percent for the period.

April’s jobs report showed a creation of 223,000 jobs and an unemployment rate of 5.4 percent. Average hourly earnings increased 0.1 percent, a touch below expectations of 0.2 percent.

The Dow futures more than tripled from about 50 points to as much as 191 points on the jobs report, which was mostly in-line with expectations.

Analysts polled by Reuters expected the nonfarm payrolls report to show the creation of 224,000 jobs in April, with unemployment lower at 5.4 percent.

In other economic news, wholesale inventories up 0.1 percent in March, versus 0.3 percent gain estimates.

European equities gained, with the FTSE 100 jumping about 2 percent on a more decisive-than-expected U.K. election outcome.


Impressive Rebound…But will it Last?

Lottery

What a market, at around 5am the ES S&P 500 Futures bottomed out at 2057 only to go as high as 2088 today.  A recovery of more than 30 points.  Quite impressive and has a lot of traders scratching their heads I am sure.  In my humble opinion, this is merely a strong counter trend.  A trap for the bulls.

Looking at the chart we have a lower high and a lower low on the S&P daily which may signal a trend change to the down side.  Other than February the market has been very volatile this year.  Particularly since late March were it has barely strung 2 positive days together with only mini swings as it ground higher to a new All Time High.

I think the chance of seeing a new high in the market now are very slim.  As always, don’t trade opinions, only trade price.  I am currently in cash, but in the unlikely event of it breaking higher I will no doubt be a buyer.  Just a cautious one.

Tomorrow the focus is the 8:30am release of the jobs report.  Expect some volatility there, expectations are pretty high this time.

Market News:

U.S. equities traded higher on Thursday as investors awaited Friday’s jobs report and yields eased slightly from recent highs.

The Dow Jones industrial average briefly gained more than 100 points but remained below the psychologically key level of 18,000. The Nasdaq also held below 5,000. The S&P 500 attempted to break initial resistance at 2,093, a level highlighted by BTIG’s chief technical strategist Katie Stockton.

Thursday’s gains marked a rebound from the last two days’ selloffs in both the bond and equity markets.

Friday’s Jobs report:  Analysts polled by Reuters expect Friday’s report to show the creation of 224,000 jobs in April, with unemployment lower at 5.4 percent.

Initial claims for state unemployment benefits rose 3,000 to a seasonally adjusted 265,000 for the week ended May 2, the Labor Department said on Thursday. Claims for the prior week were unrevised at 262,000, which was the lowest reading since April 2000.

Friday:

Earnings: Toyota, JD.com, BioCryst Pharma, Liberty Media, AOL, Health Care Reit, NRG Energy, Sirona Dental Systems

8:30 a.m.: Employment report

10:00 a.m.: Wholesale trade


Stop Losses – A Necessary Evil

Stop Losses

I got stopped out of one of my trades today….I hate being stopped out as much as the next person. But in this game you cannot avoid losses. You just have to make sure they are small. I rather like the picture above almost as much as I like George Soros’s quote about trading:

“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong”

The market has been trading in a tight range for almost 2 weeks now. Shifting between 2060 and 2120 in the ES S&P 500 Futures. I have been expecting it to break higher, but negative news keeps dragging it back down.

Should it break below again tomorrow, the next support zone is 2070 then 2060. Personally I don’t think it will go much lower now, but I don’t trade my opinions, I only trade price, and price is telling me via the trading system that it is time to reduce risk and wait and see.

The S&P is vulnerable, but lets see if this is just a retracement for the next leg higher. If it’s not, then I will most likely be out for a couple of weeks searching for a bottom. I am just convinced that there must be another higher high before we will see a bigger multiday correction.

Market News

U.S. stocks closed about 1 percent lower on Tuesday as investors eyed higher bond yields, mixed domestic data and renewed concerns over Greece.

The major averages failed to hold above psychologically key levels. The Dow Jones industrial average closed below 18,000, off 142 points after an earlier decline of more than 150 points.

The Nasdaq underperformed, falling about 1.5 percent to close below 5,000. The iShares Nasdaq Biotechnology ETF (IBB) fell more than 2 percent. Apple was the worst-performing blue chip, while other tech giants Microsoft and Google also declined sharply. The S&P 500 failed to stay above the key 2,100 level.

The Russell 2000 fell more than 1.5 percent, giving back recent gains to trade near last Thursday’s lows and up less than 1 percent for the year. The index of small-cap, domestically-focused firms had hit records with the strengthening dollar.

The Dow transports closed down 1.5 percent, with oil settling above $60 a barrel for the first time since December 2014.

European equities closed sharply lower on Tuesday as investors weighed Greece news despite good earnings from banking giants HSBC and UBS.

In the continuing Greek debt drama, stocks and bonds sold off in Athens on news the International Monetary Fund may cut a funding lifeline to Greece unless its European partners accept more debt write-downs, the Financial Times reported. Germany’s finance minister later rebuffed the report.

Data for the second quarter has been more encouraging. April’s non-manufacturing ISM hit a five-month high, coming in at 57.8 versus the expected 56.3 and March’s 56.5.

The pace of expansion in the U.S. services sector eased from a seven-month high in April on a dip in new business growth, but hiring in the sector accelerated to its highest since June, Financial firm Markit said.

Chinese shares plummeted amid reports of brokerages raising margin requirements and news that the Reserve Bank of Australia cut interest rates for the second time this year.

Wednesday

Earnings: Tesla Motors, Marathon Oil, Sunoco Logistics, Transocean, TripAdvisor, A-B InBev, GlaxoSmithKline, Occidental Petroleum, Chesapeake Energy, HollyFrontier, Motorola Solutions, 3D Systems, SodaStream, Wendy’s, Activision Blizzard, 21st Century Fox, Keurig Green Mountain, WholeFoods, Rayonier , WebMd

7:30 a.m.: Mortgage applications

8:15 a.m.: ADP private payrolls

8:30 a.m.: Productivity and costs

9:15 a.m.: Fed Chair Janet Yellen and IMF MD Christine Lagarde on panel

10:30 a.m.: DOE oil, gasoline inventories

1:15 p.m.: Kansas City Fed’s Esther George on credit markets panel

1:30 p.m.: Atlanta Fed Dennis Lockhart on monetary policy