The markets opened weakly today, probably fueled by the weak earnings report from Macy's and perhaps the continuing soap opera in Washington. SPX opened at $2395 and fell as far as $2382 before bouncing and closing at $2394, down five dollars on the day. There is a strong support level at $2380 that was established on May 3rd and 4th, and that support was reinforced today. RUT traded in similar fashion, trading down as far as $1380 before recovering some of the losses to close at $1390, down $9. RUT has been trading at or just above $1390 for the past seven sessions.
Today's spike lower sent volatility upward, with the VIX hitting a high at 11.2% before settling back to 10.6%. Trading volume on both the S&P 500 and the NASDAQ Composite came in below the 50 day moving average today, in spite of this morning's plunge lower. That tells me that no one hit the panic button.
The price behavior of today's markets reinforces the fact that the bulls are firmly in control of this market. Buying the pull backs remains a profitable strategy.
The resilience of these markets is notable. My conclusion is that a break out to the upside is the most probable immediate future. The fact that volatility didn't completely erase its intraday spike higher suggests today's decline made some traders uneasy. I remain bullish but also very cautious.