On a day of see saw price action, stocks closed higher on mixed trade. Stocks gapped up at the open, sold off during the first hour of trading, and then rallied the remainder of the day to close near session highs. The small-cap Russell 2000 was the day's biggest winner, as it posted a 1.4% gain. The Dow Jones Industrial Average tacked on 1.3%, while both the Nasdaq and the S&P 500 advanced 1.2%. The S&P MidCap 400 finished higher by 1.1%.

For five days now, the broad market has ping-ponged back and forth in a tight range. A quick review of the major averages should help to shed some light on the current state of affairs in the market.

The Nasdaq, small-cap Russell 2000 and S&P MidCap 400 have all struggled to reclaim their respective 20-day EMA's, while the S&P 500 and the DJIA have shown some relative strength compared to the other indices. As of the close yesterday, both of these indices were trading above the 20-day EMA.

Nasdaq: The Nasdaq has resistance has resistance near 2885 and support near 2800. If the Nasdaq rallies above 2885, the next resistance is at the 50-day MA. Below 2800, the Nasdaq should find support at the previous swing low.



S&P 500: The S&P 500 has resistance at 1335 and support at 1305. Above 1335, the next resistance on the S&P 500 is at the 50-day MA. The next support on the S&P 500 is the prior swing low of 1266.



DJIA: The next resistance on the DJIA is from 12610 to 12650. Above 12650, the Dow will find resistance at its 50-day MA. The next support on the Dow is at the 200-day MA and the June 4th swing low.



S&P MidCap 400: The S&P MidCap 400 should find resistance in the 933 - 936 range, and support at 903. Below 903, this index has support at the previous swing low (882). Above 936, the S&P MidCap 400 should see resistance at the 50-day MA.



Small-cap Russell 2000: The next resistance on the Russell is at 776. Above that, the Russell should find difficulty getting through the 787 mark. Yesterday's low of 748 is the first line of support on the Russell. If the Russell move below this level, its next support is at the June 4th swing low of 729.75.

 

Deron Wagner is the Founder and Head Trader of both Morpheus Capital LP, a U.S. hedge fund, and MorpheusTrading.com, a trader education firm.