After making new all-time highs last week and matching those levels yesterday, markets are actually lower today. The S&P 500 has slipped back below the key former resistance area of 1700, but it appears that the bulls will not give this support level up without a fight. Stocks were weak immediately off the open, but have since pared some of the morning’s losses. Today’s move lower is being lead by the Russell 2000 for the second day in a row, as the index is about 1% lower on the session. The Dow, S&P 500, and Nasdaq are each slightly stronger, lower by about 0.6% each. Bonds are higher after a better-than-expected two-year auction at 1:00 today. On the open, bonds were once again very weak, but they have now turned slightly green on the session. Metals are getting hit again today, with gold and silver both about 1% lower.
CHART OF THE DAY
The ExOne Company (XONE) – The 3d printing concern has been on a tear since its IPO in February, up by nearly 200% in only 6 months. The shares recently peaked near the 75 level and sold off sharply. However, they found some support near 56 and have since traded upward. Today was a very big day for the stock, as it marks the end of the “lockup” period for IPO investors. When companies go public, there is a set amount of time that the initial investors must hold the stock before they’re allowed to sell. In this case, you would expect many sellers to step in after such a massive run starting in February. However, XONE is actually up over 4% today, indicating that there aren’t any investors that are eager to part ways with their stock. This is a great sign going forward and could trigger the next leg higher, as many bulls were likely very hesitant to step in and buy the company ahead of today.
I like a long entry here with a stop on a close below 65. I would initially target a move back to 75, with 80 and beyond as stretch target.s
WHAT I’M EXPECTING
Continued choppy action. While sellers did step in today, there doesn’t seem to be much force behind the move lower. Until the S&P 500 can break 1650, pullbacks should be bought.