Major averages were up on lower volume compared to Friday's high-volume Russell Index rebalancing day. The NASDAQ moved back above its 50-day moving average while the S&P 500 remains below its own 50-day line. Going into tomorrow's short trading day and the Thursday holiday, we would not be surprised to see the action slow and the market attempt to "melt" to the upside.
In economic news, The Institute for Supply Management's manufacturing index bounced back to 50.9 in June from 49 in May, but the ISM said employment at factories contracted for the first time in nearly four years. Over in China, economic data also came in mixed with factory activity in China weakening in June, and China's official purchasing managers' index or PMI falling to 50.1 in June from 50.8 in May.
Tesla Motors (TSLA) rose to new highs as it broke out of its high, tight flag formation on about average volume. This does not seem to be deterring the stock from moving higher in pre-open trade this morning. We have reported on TSLA a number of times (see archives) as its fundamentals and technicals give it clear model book stock status.
As trade slows around the Fourth of July holiday, a favorable volume comparison situation might develop that helps to create a follow-through day in the indexes. Currently the indexes remain in what is now a five-day rally attempt off of last Monday's lows.
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