Sam Collins

Few More Up Days Likely Before Pullback

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Caution surrounding anticipation of Q3 earnings and a revenue miss by Johnson & Johnson (JNJ), as well as the Senate Finance Committee's approval of a health care reform bill, conspired to end the S&P 500's (SPX) six-day winning streak. But, even so, the market showed impressive resilience as it rallied in the late afternoon, wiping out the big losses of the morning.

The financial sector was weak yesterday following several days of gains. The poor showing was attributed to analyst Meredith Whitney's downgrade of Goldman Sachs (GS) to "neutral" from "buy." Goldman closed off 1.54%. 

CIT Group (CIT) fell more than 11% following the resignation of its CEO.

On the Dow Jones Industrial Average (DJI), every financial stock in the index registered a loss, with American Express (AXP) off 0.68%, Bank of America (BAC) down 1.22%, and Travelers (TRV) off 1.66%.

At the close, the Dow was off 15 points to 9,871, the S&P 500 fell 3 points to 1,073, and the Nasdaq (NASD) gained a point to 2,140. 

The NYSE traded 1.1 billion shares with decliners outpacing advancers by about 4-to-3. On the Nasdaq, decliners were slightly ahead of advancers with 637 million shares traded.

November crude oil gained 88 cents, closing at $74.47 a barrel, and the Energy Select Sector SPDR (XLE) gained 9 cents to $57.01. 

December gold rose $7.50 to $1,065, another record high, on U.S. dollar weakness. The PHLX Gold/Silver Index (XAU) also made a new closing high at $179.47, for a gain of $3.20.

What the Markets Are Saying

At some time during each week, I like to pass on my evaluation of the various internal and sentiment indicators. I usually do this at a critical time in a trend, and since prices are nearing the top of the much-mentioned bull channel, let's do that now.