The markets have been unable to make any real progress this week so far. While the bears anxiously await a pullback, the bulls remain confident with no real reason to close long positions. The S&P 500 (SPY ) remains right at all time highs and has spent the first part of the week trading in a very small range. Many have questioned whether this is the start of the summer doldrums but with the Federal Reserve due to announce their interest rate decision tomorrow, volatility can't be written off just yet.
The Nasdaq 100 (QQQ ) on the other hand continues to be the dominant market. It seems that almost every day is marked with a new all time high and this week it has already done this twice. The consistent buying pressure has been impressive and trading volume remains consistent. For the year the Nasdaq 100 boasts a 16% rally at this point with very little sign of selling pressure.
One of the driving forces behind the slow markets this week is the lack of participation in the banking sector (XLF ). The first two days of the week have been almost perfectly flat which causes low volatility in the S&P. Technical traders have to lean bullish in the short term but with little effort by the XLF to get over the $24 resistance level it leaves many wondering if it heads lower first. For the year the banking sector has been pretty flat with only modest gains.
Gold (GLD ) continues its pullback this week. Technical traders note that the 200 day simple moving average is holding but with little fear in the broad markets there just seems to be no reason for the safe haven trade. A break down out of the tight range in the S&P 500 would likely cause a small bounce in gold.
Finally the healthcare sector (XLV ) has been strong this week, continuing on its run from last week. So far its only up a fraction of a percent but each day it seems to climb a little closer to the only resistance on the chart which is the prior high. It seems that traders are hesitant to take profits until we approach the $76.75 level. Until then the buying volume remains consistent.
