THE FLAT MONDAY

It was totally flat and boring yesterday all US indices. Stocks were flat like a pancake. The Dow Jones index snapped its six-session winning streaks. U.S. big cap stocks fell and SP 500 dropped for the first time in seven sessions. After a great last week when SP500 index rose 1.4 percent, the most in two months, closing at an all-time high. The DJIA also ended the last week at a record level.

More detailed:

• S&P 500 -0.01% 
• Dow -0.06% 
• Nasdaq +0.01% 
• Russell 2000 -0.3%

After the record levels reaching last week, the market took a breath and consolidated slightly. This Monday was a perfect pattern of no volatility at all. The SP500 has not had any daily move of more than 1% since beginning of April. Since that time the SP500 gained 8.1%.

Narrow trading ranges mean also low volatility, which is good on one side because most people couldn’t burn their money. But on the other hand it means the rapid movements need to come shortly, the eruptive period is getting closer and closer. The low trading ranges are mostly followed by bull rally.

In technical perspective the DJIA is in a range now and could come more consolidations. The key resistance level needs to be taken 16,940 being more bullish again.

The BFM Assets Team.