Bulls Recover Near-Term Support Levels, Again

U.S. markets continued their month long see-saw action after tapping fresh weekly lows, then closed higher, despite moves in the U.S. bond market highlighting ongoing fears of a recession. The 10/2-year Treasury yield inverted to levels not seen since 2007 with the rate on the benchmark 30-year Treasury bond also hitting a new all-time low.

Despite the worries, the major indexes showed strength throughout the second half of action to reclaim near-term resistance levels. Volatility eased after closing back below a key level of support but remains at a high risk level winding down the week and month.

The Russell 2000 rallied 1.2% despite testing a fresh monthly low of 1,450 on the open. Current and lower resistance at 1,475-1,490 was cleared but held on the rebound to 1,478 afterwards with more important hurdles at 1,500-1,515 and 200-day moving average.

The Dow gained 1% following the midday push to 26,041. Prior and lower resistance at 26,000-26,200 was cleared and held with more important hurdles at 26,400-26,600 and the 50-day moving average.

The S&P 500 added 0.7% after trading in a 37-point range while trading to an intraday high of 2,890. Lower resistance at 2,875-2,900 was recovered with a move above the latter getting 2,925-2,950 and the 50-day moving average back in play.

The Nasdaq rose 0.4% after testing an intraday high of 7,866. Near-term and lower resistance at 7,850-7,900 was cleared and held with a close above the 7,950 level getting 8,000-8,050 and the 50-day moving average back in focus.

Energy and Consumer Discretionary were the strongest sectors after rising 1.4% and 1.3%, respectively, while Industrials jumped 1.2%. Utilities were the only sector that showed weakness after falling 0.3%.