The Nasdaq Composite ($COMPX) ended the session higher by 61.98 points, or 2.35%, on Monday and it closed at 2,699.44. The strongest performers in the Nasdaq-100 ($NDX) were Green Mountain Coffee (GMCR) (+8.67%), Baidu (BIDU) (+8.07%), First Solar (FSLR) (+7.77%), and Ctrip.com (CTRP) (+6.55%). Only Costco (COST) (-0.96%) and Sears Holdings (SHLD) (-0.08%) posted a loss.
Nasdaq Composite (Figure 3)
After flirting with the 100-day moving averages for just over a week, the Dow Jones Ind. Average ($DJI) and S&P 500 ($SPX) finally pushed through them on Friday to strike the next level of daily resistance we've been watching at their 200-day moving averages. As we head into Tuesday's trade we are once again looking for corrective action with a strong potential for seeing the day's highs having already hit in premarket trade. Both of these major indices had three distinct highs hit on the 15-minute time frame on the all-sessions charts between Friday and Monday. They then paused longer in overnight trade with a gradual pullback afterhours on Monday into early Tuesday morning before breaking to a fourth high. This leaves the trend exhausted with a high probability of a break in the 15-minute uptrend channel.
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.