A Leading Indicator For the Nasdaq
The Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating)
continues its roller coaster ride. Just when it looks as if we may have some
positive movement to the upside, the index collapses and falls back down.
Support on the intraday chart is around 9940. Initial overhead support is at
9960 and secondary resistance is at 9990.
The current decline in the Semiconductor sector
is once again weighing on the tech-heavy Nasdaq Composite
(
$COMPQ |
Quote |
Chart |
News |
PowerRating). The
PHLX Semiconductor Sector
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) has dropped over 14% for
the past nine sessions. Keep an eye on the SOX
because sometimes it is a leading indicator for the Nasdaq. The lack of trading volume also has contributed to the
fall.
Click Here to read Kevin Haggerty. He talks about divergence in
the markets.
This morning, June gold
(
GCM2 |
Quote |
Chart |
News |
PowerRating)
continued its strong move upward because of the weaker dollar. June
gold has influence on the movement of gold stocks. If profit-taking takes place
in gold futures today, we could see the
Phlx Gold & Silver Index
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) and some of the gold mining stocks pull back. Some of those
stocks include Anglogold
(
AU |
Quote |
Chart |
News |
PowerRating), Barrick Gold
(
ABX |
Quote |
Chart |
News |
PowerRating), Newmont Mining
(
NEM |
Quote |
Chart |
News |
PowerRating)
and Placer Dome
(
PDG |
Quote |
Chart |
News |
PowerRating).
One of the stronger sectors on the day is the
Morgan Stanley Healthcare Payor
Index
(
$HMO.X |
Quote |
Chart |
News |
PowerRating). Some of the stocks that are helping the index
trade higher are Mid-Atlantic Medical
(
MME |
Quote |
Chart |
News |
PowerRating), TrigonHealth
(
TGH |
Quote |
Chart |
News |
PowerRating) and
United Healthcare
(
UNH |
Quote |
Chart |
News |
PowerRating).
Coca-Cola Enterprises
(
CCE |
Quote |
Chart |
News |
PowerRating) is
pulling back from the high and testing its 20-day moving average. CCE has a
TradingMarkets.com
RS3 of 86 and an uptrending
ADX of 43.
Dillard’s (DDS)
is forming a bullish pennant on the daily chart. A breakout above 30.00 with
increasing volume could be a trigger point. DDS has a
TradingMarkets.com RS3 of 97 and an uptrending
ADX of 30. Dillard’s is trading at 29.71, up 51.
Merck (MRK)
is touching the 20-day MA. Swing traders may want to keep an eye on
Merck for an intraday pullback entry. It looks like MRK is trying
to bounce off the 20-day and 50-day MA after a five-day pullback. Volume on this
morning’s up thrust was strong, so pullbacks on lighter volume may be buyable.
Merck has the potential to offer some further upside over the next few days.
Uptick Volume on the Dow is slightly more
positive than the Downtick volume. And the Downtick volume is outpacing the
Uptick volume on the Nasdaq. NYSE Adv/Dec 1319/1750. Nasdaq Adv/Dec
1136/2098.