There is the potential for one more upside push to complete a three-wave trend, but it could just as easily hold as a two-wave correction off lows on the 15 minute time frame. This second scenario would actually be better for the bulls heading into next week since it would help create the price action necessary to round off the market more substantially on the daily and 60-minute time frame as discussed in Thursday's column. Right now price action is still favoring daytraders. A holiday weekend also looms, which is going to create a lighter-volume session as market participants head for the beaches, lakes, and hills for the Memorial Day weekend.
The Dow Jones Industrial Average ($DJI) ended the day with a gain of 8.10 points, or 0.07%, and closed at 12,402.76 on Thursday. The top performers were Microsoft (MSFT) (+1.98%), Hewlett-Packard (HPQ) (+1.50%), General Electric (GE) (+1.04%), and Caterpillar (CAT) (+0.91%). The worst performers were Home Depot (HD) (-1.20%), Merck (MRK) (-0.84%), and Intel (INTC) (-0.79%).
The S&P 500 ($SPX) gain of 5.22 points, or 0.4% and closed at 1,325.69. The top percentage performers were Tiffany & Co. (TIF) (+8.57%), Netapp (NTAP) (+6.92%), Coach (COH) (+5.01%), Starwood Hotels & Resorts (HOT) (+4.97%), and Pulte Group (PHM) (+4.94%). Tiffany & Co. (TIF) reported a 12% jump in sales and raised its quarterly dividend payment from 25 cents a share to 29 cents a share. The worst performer was Computer Sciences (CSC) (-12.95%). It was followed by strong losses in Big Lots (BIG) (-2.75%), First Solar (FSLR) (-2.21%), and Tellabs (TLAB) (-2.20%).
The Nasdaq Composite ($COMPX) ended the session higher by 21.54 points, or 0.78%, on Thursday and it closed at 2,782.92. The top performers in the Nasdaq-100 were Netapp (NTAP) (+6.92%), Citrix Systems (CTXS) (+4.79%), Broadcom (BRCM) (+4.27%), and F5 Networks (+FFIV) (+2.76%). Netapp (NTAP) reported strong quarterly results following Wednesday's close and also offered a strong outlook for the second quarter. The weakest performers in the Nasdaq-100 were Vertex Pharmaceuticals (VRTX) (-2.32%), First Solar (FSLR) (-2.21%), Applied Materials (AMAT) (-1.59%), and Yahoo (YHOO) (-1.05%).
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.