MONDAY'S MARKET WRAP-UP
Market Snapshot for January 30, 2011 (4:47 p.m. ET):
Closing Prices: DOW 12,653.72 (-6.74, -0.05%), S&P 500 1,313.01 (-3.32, -0.25%), NASDAQ 2,811.94 (-4.61 -0.16%), Nikkei 225 8,793.05 (-48.17, -0.54%), DAX 6,444.45 (-67.53, -1.04%), FTSE 5,671.09 (-62.36, -1.09%)
OIL 98.96, GOLD 1,729.20, SILVER 33.45
EURO 1.3141, YEN 76.33, BRITISH POUND 1.5708, U.S. DOLLAR INDEX 79.225
Dow Jones Inds. and S&P 500 Hit 20-Day SMA
The Dow Jones Ind. Average ($DJI) and S&P 500 ($SPX) pulled back to their 20-day moving average zones for the first time in approximately six weeks on Monday. Friday's weakness was followed by a second round of selling heading into Monday morning after weakness overseas led to a strong downside gap into the opening bell. The gap alone nearly brought the indices to this support level and the fact that both indices had closed in the zone of their 10-day moving averages left the market experiencing wider-than-average opening losses to begin the session.
The market overall has a tendency to want to close larger-than-average gaps except in circumstances where the gap itself triggers a daily or weekly setup, such as a trading range breakdown. Since the momentum of the selling between Friday's highs and Monday's open, however, was not stronger-than-average, the break in the 10-day moving average alone was not enough to trigger a larger daily sell signal as opposed to merely a smaller 15-time time frame correction within the context of the larger trend.
Dow Jones Industrial Average (Figure 1)