U.S. Stocks Push Higher, The Bulls Are Controlling The DOW

This morning’s cash open on Wall Street has been another strong one. U.S. indices are firmly in the green, with the DJIA up over 100 points and the S&P 500 seven. Mixed numbers coming from the U.S. employment sector have not dampened anyone’s optimism.

Earlier, a moderate rise in Continuing Jobless Claims (May 25) was matched by declining Initial Jobless Claims (June 1). These are secondary metrics and have been largely ignored by the markets. The 3.8% Unemployment number from last week is the one that has equity players giddy. For now, it appears that it is pedal-to-the-metal “risk on.”

DOW Technicals

In an update from earlier in the week, I outlined a short trading plan for June E-mini DOW futures. The timing of the trade was not optimal, pending futures contract rollover. The result was a definitive failure. The DOW broke above 25,000 toward all-time highs with vigor.

Trades like yesterday’s short from 24990 make me glad the E-mini DOW is a $5 per tick contract. It performed miserably as equity bulls bid everything in sight. In fact, they are continuing to do so.

Overview

For the moment, it appears that U.S. equities are headed to the moon. Bullish participation spiked dramatically over the 25,000 in the DOW, a signal that the big money may be getting long for the intermediate-term.

Here are the fundamentals behind the recent five-day rally:

• Optimism over the upcoming U.S./North Korea Summit
• 3.8% U.S. Unemployment driving growth

The idea of a denuclearized Korean peninsula is gaining steam in the markets. Gold futures continue to test levels beneath 1300.0, illustrating the fading angst of last Fall’s North Korean missile tests. When taking into account historically low U.S. Unemployment, investors are excited about being long stocks.

Things can always change, a strong conclusion to the trading week appears likely for the U.S. indices. With no big events scheduled for tomorrow, the DOW and S&P 500 may spin higher by Friday’s closing bell.