The Dow Jones Industrial Average (DJIA) continued to battle overhead resistance at its declining 10-day moving average on Tuesday, but the blue-chip barometer lost another round, plunging some 113 points on the day. However, the pullback has placed the Dow within spitting distance of support near 10,000 once again, meaning we could see the DJIA bounce in today's trading. Furthermore, the S&P 500 Index (SPX) comes into this morning perched above support in the 1,060 area. Resistance for the SPX could materialize in the 1,090 area today, which is home to the index's declining 10-day trendline. Heading into the open, futures on the DJIA and the SPX are trading roughly 49 points and 4 points above fair value, respectively. Even with the indications for a positive open, I would expect any rally to be muted ahead of Friday's May jobs data. Finally, the CBOE Market Volatility Index (VIX) rebounded from support at its 20-day moving average on Monday, reclaiming the 35 level in the process. However, given the early positive bias in stock futures, we could see the VIX pull back to around the 30 level by the close.
Regards S.
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