WEDNESDAY'S MARKET WRAP-UP
Market Snapshot for January 4, 2011 (9:00 p.m. ET):
Closing Prices: DOW 12,418.42 (+21.04, +0.17%), S&P 500 1,277.30 (+0.24, +0.02%), NASDAQ 2,648.36 (-0.36, -0.01%), Nikkei 225 8,503.39 (-56.72, -0.66%), DAX 6,111.55 (-55.02, -0.89%), FTSE 5,668.45 (-31.46, -0.55%)
OIL 102.95, GOLD 1,617.20, SILVER 29.31
EURO 1.293, YEN 76.71, BRITISH POUND 1.5606, U.S. DOLLAR INDEX 80.455
Throw Your Hands Up Everybody!
The market has been having as many ups and downs on the 15 minute time frame as my favorite Busch Gardens roller coaster! All the while, the daily uptrend has continued as expected, but hanging onto this move will become more and more difficult heading into next week. So far the intraday action has shown us strong trends on the 15 minute charts, but those trends have failed to offer decent follow through into the next trading day since the new year began. After several pullbacks, however, this is likely to change by week's end with a break in the channel that began Tuesday morning.
Dow Jones Industrial Average (Figure 1)
The Dow Jones Industrial Average ($DJI) ended the day on Wednesday with a gain of 21.04 points, or 0.17%, and closed at 12,418.42. Two-thirds of the Dow's thirty index components posted a gain. The strongest performers were Microsoft (MSFT) (+2.39%), Alcoa (AA) (+2.38%), and Intel (INTC) (+2.32%). The weakest were Verizon (VZ) (-1.31%) and Wal-Mart (WMT) (-1.03%).
The S&P 500 ($SPX) finished the session with a gain of 0.24 points, or 0.02%, and closed at 1,277.30. The top performing industry groups were materials (+3%) and financials (+2.8%). The strongest individual percentage performers in the index were Netflix (NFLX) (+11.36%), Cabot Oil & Gas Corp. (COG), and VF Corp. (VFC) (+4.40%). The weakest were Autonation Inc. (AN) (-6.83%), MetroPCS (PCS) (-6.39%), and Tenet Health Care (THC) (-5.44%).
The Nasdaq Composite ($COMPX) ended the session lower by 0.36 points, or 0.36%, on Wednesday and it closed at 2,648.36. The strongest performers in the Nasdaq-100 ($NDX) were Netflix (NFLX) (+11.36%), Micron Tech. (MU) (+3.56%), and Nuance Communications (+2.89%).. The weakest were Electronic Arts (EA) (-4.74%), eBay (EBAY) (-2.77%), and Perrigo Co. (PRGO) (-3.51%).
S&P 500 (Figure 2)
The latest swing in the futures market came as the sharp morning selloff amid European trade was brightened heading into Thursday's unemployment data in the States. The index futures jumped off 6:00 a.m. ET lows and broke the morning's downtrend with the 7:00 a.m. correction period. Then came the data. Claims for new unemployment benefits fell 15,000 last week with initial claims for state unemployment benefits dropping to a seasonally adjusted 372,000. Consistent reports under 400k have been welcomed in recent weeks, but it's still a long way to a solid recovery.
The real test for this week will be tomorrow's report on December's employment, including nonfarm payrolls and the latest unemployment rate. Resistance hit once again at 8:30 a.m. as the indices tested morning highs, leaving things set for a pullback ahead of the opening bell, but without a solid development just yet for a break in that larger 30 minute channel from the week-to-date.
Nasdaq Composite (Figure 3)
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.