Market Snapshot for September 29, 2011 (7:39 pm ET):
- Closing Prices: DOW 11,153.98 (+143.08, +1.3%),S&P 500 1,160.40 (+9.34, +0.81%), NASDAQ 2,480.76 (-10.82, -0.43%), Nikkei 225 8,701.23 (-, -), DAX 5,639.58 (+61.16, +1.1%), FTSE 5,196.84 (-20.79, -0.4%)
- OIL 83.00, GOLD 1,624.10, SILVER 30.725
- EURO 1.3594, YEN 76.73, BRITISH POUND 1.561, U.S. DOLLAR INDEX 78.605
Daily Channel Continues, Outlook Confirmed
This week has been a difficult one for swingtraders on both the bullish and bearish sides. As we headed into the week, we were looking primarily at daytrades for the least risk. The technicals were pointing in favor of rapid swings back and forth on the 15 minute time frame that would limit follow through from one session to the next and add risk for multi-day holds by increasing odds of getting flushed out of open positions or creating adverse moves that would be enough to at least wreck havoc with one's nerves! As anticipated, Thursday was just another continuation of this trend.
Dow Jones Industrial Average (Figure 1)
The market actually opened with strong gains on Thursday following the sharp losses of the previous session. The index futures had crept up throughout the early morning hours with some help from news out of Europe that Germany would stand behind the latest proposed expansion of the European Financial Stability Facility (their version of a bailout plan). The move was strengthened further by unexpected jobs data.
The number of individuals filing for first time unemployment benefits fell sharply to 391,000 last week. It was expected that they would fall to 420,000, but that they would not come close to breaking the 400,000 level. Office shutdowns due to recent hurricane activity on the east coast, however, likely contributed to the large reported drop and a more accurate adjustment will likely come over the next several weeks.
S&P 500 (Figure 2)
The Dow Jones Industrial Average ($DJI) ended the day on Thursday with a gain of 143.08 points, or 1.3%, and closed at 11,153.98.Twenty-eight of the Dow's thirty index components posted a gain. The top performers were Travelers (TRV) (+3.16%), Bank of America (BAC) (+3.08%), JP Morgan Chase (JPM) (+3.02%), and Chevron Corp. (CVX) (+2.89%). The only losers were Microsoft (MSFT) (-0.51%) and Intel (INTC) (-0.45%).
The S&P 500 ($SPX) finished the session with a gain of 9.34 points, or 0.81%, and closed at 1,160.40. The top percentage gainers in the S&P 500 on Friday were Hartford Financial Svcs Group (HIG) (+8.15%), Genworth Financial Inc. (GNW) (+7.91%), Keycorp (KEY) (+7.60%), and Lennar Corp. (LEN) (+6.91%). The top decliners were Advanced Micro Devices (AMD) (-13.66%), Netflix (NFLX) (-10.97%), and Davita Inc. (DVA) (-8.77%).
The Nasdaq Composite ($COMPX) ended the session lower by 10.82 points, or 0.43%, on Thursday and it closed at 2,480.76. The strongest performers in the Nasdaq-100 ($NDX) were Life Technologies Corp. (LIFE) (+3.15%), Qiagen (QGEN) (+2.55%), Sears Holdings Corp. (SHLD) (+2.52%), and Autodesk (ADSK) (+2.06%). The top decliners were Netflix (NFLX) (-10.97%), Sirius XM Radio (SIRI) (-10.24%), Baidu Inc. (BIDU) (-9.17%), and Wynn Resorts (WYNN) (-7.34%). Netflix is expected to face steep competition ahead and it has been under extreme pressure recently.
Nasdaq Composite (Figure 3)
As we head into Friday morning the main premarket data will include August's personal income and personal spending numbers. The index futures are showing weakness following strong resistance from Thursday's mid-day trading range, which hit shortly after the closing bell. Since then the market has crept lower and the momentum continues to show weakness. The indices are at lower channel support and are likely to have a difficult time holding this trend into the weekend, but there is little out there at present to suggest much hope for the bulls heading into October. Instead, we are seeing a bearish channel developing on the daily time frame that makes it likely that the market will experience another wave of selling on the weekly charts this fall.
Earnings season will also be kicking off shortly and many companies are already beginning to express concern for the recent quarter. Micron Technology (MU) made headlines afterhours with a reported quarterly loss for its fiscal-fourth-quarter of 14 cents a share when analyst were expecting a gain of a penny a share. Revenue was also down, but did come in ahead of estimates.
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.