U.S. Stocks Sluggish To Open Session

U.S. stocks have opened Wednesday’s trade nearly flat in the wake of Tuesday’s historical price action. The DJIA (-30), S&P 500 SPX (-2), and the NASDAQ (+1) showed few signs of life as business resumed on American exchanges.

Last night brought much speculation as to where stocks were heading for the remainder of the week after the S&P 500 and NASDAQ posted fresh all-time highs. Thus far, equities players appear to be taking a break and reevaluating exactly where the markets stand.

Earlier today, another questionable U.S. real estate metric came across the newswires. MBA Mortgage Applications (April 19) fell almost 4% from the previous release. Coming in at -7.3%, MBA Mortgage Applications extended their losing streak and springtime trend of lagging performance. This does not bode well for the U.S. housing market and is a peripheral indication that lending may be tighter than the FED is implying.

U.S. Stocks Stall On The Open 

It has been a choppy opening half hour on Wall Street, with stocks stalling out in the wake of Tuesday’s rally. With many investors ready for another round of all-time highs, it looks like today may bring a retracement of recent bullish price action.

Here are the levels to watch for the June E-mini DOW futures contract:

• Resistance(1): Psyche Level, 26750
• Support(1): Bollinger MP, 26230

Bottom Line: In the unlikely event we see a broad-based market correction today, I will be looking to go long from downside support. Buys from 26276 in the June E-mini DOW are solid entry to the bull. With an initial stop loss at 26174, this trade produces 100 ticks on a standard 1:1 risk vs reward management plan.

Buying dips has been a profitable way to play the year-long uptrend in stocks. Of course, actually spotting a viable retracement has been a challenge. With a bit of luck, we will get a solid pullback and opportunity to go long by the end of the week.

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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