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Stocks pause after strong rebound

David Russell (david.russell@optionmonster.com)

Stocks are lower today as they pause at a resistance level from last month.

S&P 500 futures are back near unchanged after declining almost one-quarter of a percent earlier, while most European indexes fell about half a percent. Asia was mixed in the overnight session, with China up and Japan down.

The S&P 500 is now around the same level where it peaked on June 18, which was followed by a sharp drop to its 100-day moving average. The index is up more than 5 percent from its lows after that plunge. Given the selloff and rebound in recent weeks, we could be due for a period of consolidation--especially as investors brace for a flood of corporate earnings throughout July.  

The next scheduled events that could serve as catalysts are the release of minutes from the Federal Reserve's last meeting at 2 p.m. ET today. Retailers will report same-store sales tomorrow and consumer sentiment follows Friday morning. The Commerce Department's key retail-sales number is also on the calendar for Monday.

Price action in the broader market has been bullish of late, according to our researchLAB market scanner. Economically sensitive stocks such as transports, small caps, energy, and consumer discretionaries have outperformed in the last two weeks while health care and consumer staples have lagged. Technology has struggled.

Commodities are bullish this morning despite the weakness in equities and poor trade numbers from China. Oil, silver, and gold are all up by about 1 percent, while copper is posting smaller gains. Agricultural foodstuffs are mixed.

Currencies are more cautious as the Japanese yen gains across the board. But the euro, the Australian dollar, and the Canadian dollar are inching higher against the greenback.

In company-specific news, shampoo and beauty-accessories company Helen of Troy was indicated higher last night after earnings and revenue beat expectations. Nu Skin Enterprises, a seller of anti-aging products, is rallying more than 10 percent after pre-announcing strong results. Drilling contractor Nabors Industries said profit will miss consensus estimates and is down almost 5 percent as a result.

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