Nasdaq Composite (Figure 3)
The Dow Jones Industrial Average ($DJI) had a loss of 41.55 points, or 0.34%, and closed at 12,226.64 on Tuesday. Only eight of the Dow's thirty index components posted a gain on the day. Verizon (VZ) (+1.56%) was the only one to gain more than 1%. Travelers (TRV) (+0.87%) and JP Morgan (JPM) (+0.60%) were among the top three gainers. Exxon Mobil (XOM) (-2.28%), Boeing (BA) (-1.19%), and Alcoa (AA) (-1.08%) were the only components to post a loss greater than 1%.
The S&P 500 ($SPX) fell 4.31 points, or 0.32%, and closed at 1,328.01. The day's only advancing industry groups were the utilities (+0.3%) and consumer discretionary (+0.01%). The top percentage performers were Wyndham Worldwide Corp. (WYN) (+6.87%), Gap Inc. (GPS) (+6.10%), H&R Block (HRB) (+5.53%), and Marsh & McLennan Cos. (MMC) (+4.71%). JDS Uniphase Corp. (JDSU) (-10.18%) was the worst performer after faced with downgrades following the sharp rally of the past two days. Other top losers were Masco Corp. (MAS) (-9.23%) and CF Industries Holdings (CF) (-5.19%). The weakest industry groups were materials and energy shares. Both fell 1.1%.
The Nasdaq Composite ($COMPX) ended the session lower by 12.83 points, or 0.46%, on Tuesday and it closed at 2,804.35. Top gainers in the Nasdaq-100 were Warner Chilcott (WCRX) (+4.26%), Genzyme Corp. (GENZ) (+3.53%), Qiagen (QGEN) (+2.17%), and Akamai Tech. (AKAM) (+2.02%). Marvel Tech. Group (MRVL) (-5.01%), Sandisk (SNDK) (-2.75%), and Netflix (NFLX) (-2.73%) were the weakest.
As we head into Wednesday, keep an eye on the latest housing data in the form of the weekly mortgage applications and housing start, as well as the FOMC minutes. The directional bias heading into the session is slightly in favor of the bulls, but the pace of the recent buying is shifting and the index futures are starting to round off at highs. This leads me to believe that we are due for an even larger correction on the 60 minute charts in the second half of the week.
Unless otherwise stated, the index action described in this article relates to the E-mini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.
Toni Hansen is president and co-founder of the Bastiat Group Inc., DBA Trading From Main Street. Toni is one of the most respected technical analysts and traders in the industry. She has been trading and educating new traders, money managers, professional market analysts and traders throughout the boom and bust of the last decade. She has worked in conjunction with some of the world's top financial exchanges. Learn more about Toni Hansen and the educational services she provides through her website at http://www.tonihansen.com.