Do You Fib? Perhaps It's Time to Start!
Good day! Volume was on the light side once again on Thursday, but the market held technical support and resistance levels extremely well throughout the session and offered ample opportunities for day traders. Those looking for setups on the daily time frame, however, had more of a challenge. The indexes have been struggling with resistance on the daily charts and most of the session was spent within the trading range of the previous two days.
Dow Jones Industrial Average
The index futures were trading strongly higher following Wednesday's closing bell as all three of the major indices pushed for a retest of Tuesday's highs. The ES (S&P 500 e-Mini) even managed to surpass its prior high to test the upper end of its 60 minute trading channel. The earlier highs, however, proved to be too much for the Dow Jones Ind. Ave. and Nasdaq-100 e-Minis. This level held as anticipated and the index futures were heading lower in premarket trade on Thursday.
The selloff received a brief reprieve when the latest employment data was released at 8:30 a.m. ET. Initial jobless claims fell from a seasonally adjusted 438,000 a week ago to 421,000 according to the Labor Department. The index futures popped, but were unable to hold onto the gains once they retested the earlier resistance. An AvalancheTM formed on the 5-15 minute time frames between 5:00 a.m. ET and the opening bell. The short trigger quickly followed the start of the regular trading session and the downside continued into noon. This completed a second wave of corrective action since reversing off highs around 3:55 a.m. ET.
The pace of the morning selloff actually began to slow at 11:00 a.m. ET when the S&P 500 filled its morning gap. The S&Ps and Nasdaq indices bounced into their 5 minute 20 period moving averages, but the attempt was weaker in the Dow. A slightly lower low followed. This created a bear trap called a 2B. By establishing a slightly lower low instead of holding the 11:00 a.m. ET low, the market bias shifted back in favor of the bulls for afternoon trade, but the stronger pace of the morning's decline made it difficult for the bulls to gain momentum. Nevertheless, the uptrend continued into 1:30 a.m. ET on Friday morning.
The Dow Jones Industrial Average ($DJI) had a loss of 2.42 points, or 0.02%, and closed at 11,370.66 on Thursday. Just over half of the Dow's 30 index components posted a gain. The top performer in the Dow was Bank of America (BAC) (+5.42%). Financials have led the gainers over the past two sessions. JP Morgan (JPM) was up 1.327% for the day. Other strong performers on Thursday included Cisco Systems (CSCO) (+1.81%), and Verizon (VZ) (+1.76%).
The S&P 500 ($SPX) rose 4.72 points, or 0.38%, and closed at 1,233.00. The best performer in the index was American Intl. Group (AIG) (+13.17%). Dean Foods (DF) (+12.62%), Eastman Kodak (EK) (+11.32%), and Goodyear Tire (GT) (+10.21%) all rose more than 10%. The weakest performers were SAIC Inc. (SAI) (-6.42%), Airgas Inc. (ARG) (-6.26%), and Range Resources Corp. (RRC) (-3.24%).
The Nasdaq Composite ($COMPX) ended the session higher by 7.51 points, or 0.29%, on Thursday and it closed at 2,616.67. The strongest stocks in the Nasdaq-100 were Teva Pharmaceutical Inds. (TEVA) (+6.82%), Foster Wheeler (FWLT) (+4.93%), and Costco (COST) (+2.56%). The weakest were Apollo Group (APOL) (-2.94%), Adobe Systems (ADBE) (-2.09%), and Urban Outfitters (URBN) (-1.80%).