WEDNESDAY'S MARKET WRAP-UP
Market Snapshot for January 25, 2011 (10:10 p.m. ET):
Closing Prices: DOW 12,756.96 (+81.21, +0.64%), S&P 500 1,326.06 (+11.41, +0.87%), NASDAQ 2,818.31 (+31.67, +1.14%), Nikkei 225 8,847.35 (-36.34, -0.41%), DAX 6,421.85 (+2.63, +0.04%), FTSE 5,723.00 (-28.90, -0.5%)
OIL 99.82, GOLD 1,710.80, SILVER 33.105
EURO 1.3108, YEN 77.76, BRITISH POUND 1.5656, U.S. DOLLAR INDEX 79.59
12,876. That was last year's high in the Dow Jones Industrial Average ($DJI). The market has had any "big" days over the past month, but this hasn't kept it from continuing to push higher. The 200 period moving average on the 15 minute time frame and 10 day moving average on the daily have been serving as strong support. The only real attempt to come close to breaking that level was on the 13th, but the attempt lacked a confirmation move.
Over the past week the market has been trying to gain momentum once again and break free of the daily support to make a run for those previous highs from last year, but so far it has struggled to do so. Intraday strength has often been erased by weakness overseas that has pulled the index futures lower in early-morning trade. Today, however, the futures have been moving higher following only a brief selloff soon after the European open.
Dow Jones Industrial Average (Figure 1)
Wednesday's strength came on the heels of the latest Fed announcement, which included a statement for the first time ever on its stance for upcoming rate changes. The Fed stated that it expects to leave rates "as is" until late 2014. This reflects a slower view of economic growth than in the past. Additionally, it changed its inflation target to 2%, which is now in line with other major central banks.
There isn't much on the data front that will really discourage this latest attempt at a retest of highs either. New home sales for the past month are due out at 10:00 a.m. ET and are really the only thing on the docket that will offer the potential to sway sentiment. Although housing hasn't had much of an impact on intraday trade in quite some time, it has been showing some improvement recently. This could give the data more weight than it has over the past year since market will be watching for confirmation of further stability arising.
S&P 500 (Figure 2)
The Dow Jones Industrial Average ($DJI) ended the day on Wednesday with a gain of 81.21 points, or 0.64%, and closed at 12,756.96. Twenty-four of the Dow's thirty index components posted a gain. The strongest performers were Caterpillar (CAT) (+2.60%), DuPont (DD) (+2.39%), and Alcoa (AA) (+2.04%). The top percentage losers were Hewlett Packard (HPQ) (-0.7%) and Verizon (VZ) (-0.26%).
The S&P 500 ($SPX) finished the session with a gain of 11.41 points, or 0.87%, and closed at 1,326.06. All ten of the index's industry groups posted a gain. The top performing ones were materials (+1.6%), utilities (+1.6%), and industrials (+1.2%). The top individual percentage performers were Textron Inc. (TXT) (+14.58%), CA Inc. (CA) (+9.68%), and Apple (AAPL) (+6.24%). The top decliners were Corning (GLW) (-10.74%), Xerox (XRX) (-9.92%), and Motorola Solutions (MSI) (-6.10%).
The Nasdaq Composite ($COMPX) ended the session higher by 31.67 points, or 1.14%, on Wednesday and it closed at 2,818.31. The strongest performers in the Nasdaq-100 ($NDX) were CA Inc. (CA) (+9.68%), Research In Motion (RIMM) (+8.59%), and Apple (AAPL) (+6.24%). The weakest were Activision Blizzard (ATVI) (-2.69%), Sears Holdings (SHLD) (-1.99%), and Google (GOOG) (-1.97%).
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.