U.S. markets closed higher across the board on Monday after President Trump said that the FDA approved blood-plasma treatment for emergency use in the treatment for coronavirus. There was also a potential sign of easing U.S./ China tensions on news President Trump is privately seeking to reassure U.S. companies that they can still do business with a Chinese messaging app.
Aside from the small-caps, the major indexes extended their winning streaks to 3-straight sessions with fresh record highs and prior resistance levels getting back into play.
The Dow was higher by 1.4% after testing a late day high of 28,314. Mid-December and lower resistance at 28,250-28,500 was reclaimed. A pop above the latter would be a bullish signal for additional upside towards 28,750-29,000 and levels from mid-January.
The Russell 2000 rallied 1% while closing on the session high of 1,568. Current and lower resistance at 1,570-1,585 was challenged but held. A close above the latter would be a bullish signal for another run towards 1,600-1,615.
The S&P 500 was also up 1% following the afternoon push to 3,432 and 2nd-straight all-time high. Unchartered territory and lower resistance at 3,425-3,450 was cleared and held. A close above the latter would indicate additional momentum towards 3,475-3,500.
The Nasdaq climbed 0.6% with the morning and lifetime peak reaching 11,462. New and lower resistance at 11,400-11,500 was breached but held. A move above the latter would suggest additional strength towards the 11,600-11,700 area.
Energy and Financials led sector strength after zooming 2.8% and 2.4%, respectively. Healthcare was the only sector laggard after giving back 0.5%.
European markets showed strong gains as signs of progress in developing a coronavirus treatment offset fears about a resurgence in cases across the continent that could risk stifling an economic recovery.
Germany’s DAX 30 surged 2.4% and France’s CAC 40 advanced 2.3%. The Belgium20 jumped 2% and UK’s FTSE 100 added 1.7%. The Stoxx 600 gained 1.6%.
Asian markets closed higher following positive coronavirus vaccine headlines and China’s approval for a coronavirus vaccine for emergency treatment. Beijing’s continued market also helped sentiment as shares of nearly 20 companies surged on their ChiNext debut, kicking off a historic reform that will see Shenzhen officially challenge Shanghai for tech listings, while adding fuel to the technology war with the United States.
Hong Kong’s Hang Seng soared 1.7% and South Korea’s Kospi jumped 1.1%. Japan’s Nikkei and Australia’s S&P/ASX 200 rose 0.3% while China’s Shanghai edged up 0.2%.
Chicago Fed National Activity Index fell -4.2 points to 1.2 in July after June’s 1.1 point gain to a record peak of 5.3. The 3-month moving average improved to a record high of 3.6 last month from June’s -2.8 dismal reading. According to the report, 56 of the 85 indicators made positive contributions, with 29 making negative contributions. Production and employment related indicators made smaller contributions to the index.
The iShares 20+ Year Treasury Bond ETF (TLT) had its 2-session winning streak snapped following the intraday pullback to $165.86. Current and support at $166-$165.50 failed to hold. A move below the latter and the 50-day moving average would signal additional weakness towards $165-$164.50.
Resistance remains at $166.50-$167. A close above the $16750 would be a more bullish signal for additional strength towards $168.50-$169 and prior levels from the start of the month.
The S&P 500 Volatility Index ($VIX) was down for the 2nd-straight session with the opening low tapping 21.25. Near-term and upper support at 22.50-22 was reclaimed with more important recovery levels at 20.50-20.
Current and lower resistance is at 23-23.50 followed by 24.50-25.
The Invesco QQQ Trust (QQQ) extended its winning streak to 3-straight sessions after trading to a record high of $286. Uncharted territory and lower resistance at $286-$286.50 was tagged but held. A close above the latter would indicate additional momentum towards $289.50-$290.
Current and rising support is at $282.50-$282 with backup help at $281.50-$281.
RSI i\remains in a slight uptrend with key resistance at 70 getting cleared and holding. Continued closes above this level would indicate additional strength towards 75 and the July and June peak. Support is at 65-60.
The iShares PHLX Semiconductor ETF (SOXX) was up for the 2nd-straight session following the intraday trip to $302.98. Prior and lower resistance $302.50-$303 was cleared but held. A close above the latter would signal a retest towards $304.50-$305 with the current all-time high at $304.69.
Near-term support is at $300-$299.50 with backup help at $298-$297.50. A close below the $295 level would signal a possible near-term top.
RSI is rebounding with lower resistance at 60-65 getting recovered. A move above the latter would signal additional strength towards 70 and the high from earlier this month and back in June. Support is at 55-50 with the latter holding since early April.