Good morning! The primary action in the market intraday on Monday was another choppy day of trading, but support and resistance levels held very well and a number of individual stocks displayed exceptional performance throughout the session. This created some nice pivot type of trading in the indices and even better momentum trading in stocks. GD, FWLT, SAP, LFC and SNDK were the main ones to catch my attention, but other top gainers included NYX, GS, MER, and FFIV.
The market got off to a rough start on the week, selling off into the 10:15 ET reversal period. This hit as the Nasdaq Composite came into prior lows and its 5 min 200 simple moving average. The support held very well and gained momentum until it was able to retake the morning trading zone. A pullback off these highs took place in the early afternoon, forming a Phoenix pattern on the 15 minute charts along the 15 minute 20 sma resistance in the S&P 500 and Dow Jones Ind. Ave. The 15 minute 20 sma was support for the Nasdaq Composite. This range broke free with the 13:30 ET reversal period.
The indices quickly gained momentum as the early afternoon range broke. The Dow and S&Ps both managed to make it back into price resistance from Friday morning which the Nasdaq closed Friday's gap before the buying slows into 14:30 and the market pulled back into 15:00. The 15:00 ET reversal period hit as the S&P and Dow found support with their 5 minute 20 and 200 simple moving averages and were able to move to slightly higher highs. The Nasdaq underperformed throughout the afternoon, however, and held the range for the last hour. When it was all said and done, the Dow gained 25.48 points, the Nasdaq gained 3.95 points and the S&Ps gained 3.13 points.
I continue to expect more choppy trading as the week progresses. As in recent weeks, my primary focus remains on the shorter time frames. Some stocks I am watching this week for continued upside include CPWR, SNDK, ALTR and WEN. Each of these has swingtrade potential.
Economic Reports and Events This Week
Monday: Consumer Credit for Nov. (3:00 pm)
Tuesday: -
Wednesday: Trade Balance for Nov. (8:30 am), Wholesale Inventories for Nov. (10:00 am), Crude Inventories 1/5 (10:30 am)
Thursday: Initial Claims 1/5 (8:30 am), Treasury Budget for Dec. (2:00 pm)
Friday: Export Prices ex-ag and Import Prices ex-oil for Dec. (8:30 am), Retail Sales for Dec. (8:30 am), Business Inventories for Nov. (10:00 am)
Key Earnings Announcements This Week
Monday: LIFC, NUHC, and SCHN.
Tuesday: EMMS, GAP, GBX, HELE, LWSN, SVU, VOL, AA, EXFO, OXM, RI, SNX, and WDFC.
Wednesday: ASHW, DNA, and SAPE.
Thursday: CRAI, INFY, MTB, MTG, SRR, CAMP, and IHS.
Friday: No earnings are scheduled
Note: All economic numbers and earnings reports are in lines with those compiled by Yahoo Finance and Briefing.com. Occasionally changes will occur that are made after the posting of this column.
Toni Hansen is President and Co-founder of the Bastiat Group, Inc., and runs the popular Trading From Main Street. She can be reached at Toni@tradingfrommainstreet.com.
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