The Nasdaq Composite ($COMPX) ended the session higher by 34.43 points, or 1.22%, on Wednesday and it closed at 2,848.27. The strongest performer in the Nasdaq-100 ($NDX) was Seagate Technology (STX) (+20.77%). It was followed by gains in Broadcom Corp. (BRCM) (+8.09%) and Mylan Inc. (MYL) (+5.88%). The weakest were Amazon.com (AMZN) (-7.70%), CH Robinson Worldwide (CHRW) (-7.02%), and Activision Blizzard Inc. (ATVI) (-1.46%).
Nasdaq Composite (Figure 3)
The market was up further afterhours on Wednesday after strong earnings from Qualcomm (QCOM), Green Mountain Coffee Roasters (GMCR), and Allstate (ALL).
GMCR shares jumped 22% after it posted earnings of 60 cents a share (18 cents higher than the previous year) and revenue growth of 102%, beating the Street estimates. GMCR saw its share prices plummet from over $115 a share in September to under $35 by November last year. It's set to open over $65 a share Thursday morning.
The market momentum continued to slow afterhours on Wednesday despite the above-mentioned earnings. Only the Nasdaq managed a higher high, but the highs were only slightly higher. This created a bull trap and further shifted the momentum of the day's rally. The result was a Momentum Reversal following Europe's open and a pullback in the Nasdaq to its premarket congestive levels from Wednesday morning. The Dow and S&P 500 have also found support at this congestion zone heading into Thursday morning. This will continue to serve as support throughout the remainder of the morning, while last week's highs in the Dow will serve as market resistance. We have not yet seen a strong pattern develop for a break in the current daily uptrend, but new multi-day positions in that direction gain risk with each passing day as the market comes closer and closer to a stronger daily correction.
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.