The Nasdaq Composite ($COMPX) ended the session lower by 14.07 points, or 0.5%, on Friday and it closed at 2,784.67. Netflix (NFLX) (+3.61%), Expedia Inc. (EXPE) (+2.87%), Vertex Pharmaceuticals (VRTX) (+2.24%), and Citrix System (CTXS) (+1.96%) were the strongest Nasdaq-100 performers. The weakest was Marvell Technology Group (MRVL) (-11.47%), CA Inc. (CA) (-2.99%), Staples Inc. (SPLS) (-2.95%), and Research In Motion (RIMM) (-2.89%). The Nasdaq Composite ended the week higher by 0.13%.
Nasdaq Composite (Figure 3)
Earnings and economic reports will be lighter this week, so most of the market's moving forces outside of the technicals will come from ongoing tensions abroad that have been greatly impacting the commodities markets in recent weeks. Libya is currently the main center of attention, but internal struggles and protests in a number of Arab nations (namely: Bahrain, Iran, Iraq, and Saudi Arabia) have left a lot of questions yet unanswered regarding the future of the region.
On Friday, gold prices once again pushed higher. Gold for April delivery rose $12.20 an ounce and settled at $1,428.60 on the New York Mercantile Exchange. Silver prices, meanwhile, hit 31-year highs and settled at $35.32 an ounce. Oil has been an ongoing point of focus given the Middle Eastern turmoil and it also rose once again on Friday and nearly hit $105 a barrel. It's high was $104.81. According to the AAA, gas prices at the pump now average $3.35 a gallon.
As we head into the new week, the market is continuing to favor further corrective action on the daily time frame that could easily last another week. Whether or not the market can push substantially higher after that point is uncertain. The larger weekly time frames suggest that there is room, but attempts to push through last month's highs could also easily act as traps with the overall momentum for the uptrend slowing on a series of higher highs, similar to what we have often seen intraday recently. My sell list for swingtrades (3-6 day holds) is greater than buy setups this week, but most suggest that the downside follow-through in the overall market won't be extreme enough to break the year's lows before bouncing once again.
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.