The S&P 500 ($SPX) gain of 6.86 points, or 0.54%, and closed at 1,278.36. The top percentage gainers in the index were Biogen Idec (BIIB) (+4.05%), Aetna Inc. (AET) (+3.61%), Humana Inc. (HUM) (+3.55%), and International Paper (IP) (+3.27%). The weakest percentage performers were MEMC Materials (WFR) (-2.84%), Alpha Natural Resources (ANR) (-2.71%), Cablevision Sys. (CVC) (-2.05%), and Financial Services Group (PNC) (-1.96%). Nabors Industries (NBR) fell 1.83% after pulling back on its second-quarter outlook.
Nasdaq Composite (Figure 3)
The Nasdaq Composite ($COMPX) ended the session higher with a gain of 13.18 points, or 0.5%, on Monday and it closed at 2,629.66. Biogen Idec (BIIB) was the top percentage performers in the Nasdaq-100. It rose 4.05%. It was followed by gains in Celgene Corp. (CELG) (+2.97%), First Solar (FSLR) (+2.85%), Mattel (MAT) (+2.68%), and Dollar Tree (DLTR) (+2.43%). The weakest performer was once again Research In Motion (RIMM), which fell another 6.7% after announcing last week that revenue came in below its own forecast. This led to a series of downgrades and price target cuts by major brokerages. Liberty Media (LINTA) (-1.65%), Express Scripts (ESRX) (-1.60%), and Apple (APPL) (-1.54%) were also top decliners.
The economic data has been light to kick off the new week, with most of the headlines geared towards Greece, but the focus will shift in the U.S. to housing starting on Tuesday morning with existing home sales and this week's FOMC interest rate announcement on Wednesday.
Despite the rounding off at lows on the 60-minute charts in the S&P 500 and Dow, the market still risks more downside into 200 day moving averages in these two indices. The 20-day moving averages will serve as resistance and the risk is high that even attempts to push higher will fall back at these levels until that 200-day sma does hit in the Dow. This can be seen in Figure 1. As a result, continue to use added caution on multi-day holds, but also continue to use the momentum shifts for strong intraday setups like we saw on Monday.
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.