E-mini market gains erode following FOMC minutes

There was not an immediately strong price reaction following the release, but the Dow Jones Ind. Average ($DJI) and S&P 500 ($SPX) both pushed to slightly higher highs on the day. This two-wave move from 14:00 to 14:45 ET created a bull trap. Meanwhile, the Nasdaq hugged its 5 minute 20 sma for a two-wave Avalanche short setup. This bearish strategy triggered around 14:45 ET and was followed by another two-wave move in the form of a bear flag off the 5 minute 20 sma resistance that took the market lower once again into the close and afterhours trade. Volume had dropped off mid-day on Wednesday ahead of the minutes, but picked up in the final two hours of trade and particularly as the closing bell approached.

S&P 500 (Figure 2)

Index Wrap Up

The Dow Jones Industrial Average ($DJI) ended the day on Wednesday with a gain of 102.55 points, or 0.9%, and closed at 11,518.85. Twenty-five of the Dow's thirty index components posted a gain. The top performers were Disney (DIS) (+3.53%), Bank of America (BAC) (+3.30%), JP Morgan (JPM) (+2.79%), and American Express (AXP) (+2.78%). The worst performers were Alcoa (AA) (-2.43%) and McDonalds (MCD) (-1.10%). Alcoa underperformed after posting lower-than-anticipated quarterly earnings.

The S&P 500 ($SPX) finished the session with a gain of 11.71 points, or 0.98%, and closed at 1,207.25. The top percentage performers in the index were CBRE Group (CBG) (+8.75%), Sprint Nextel Corp. (S) (+7.98%), MEMC Electr. Materials (WFR) (+6.41%), and Lincoln Natl. Corp. (LNC) (+6.24%). The weakest were Tellabs (TLAB) (-5.32%), Western Digital (WDC) (-4.61%), and Baxter Intl. (BAX) (-3.05%).

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