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Market Takes Time To Breathe

|Includes: AAPL, AIG, BIDU, C, CSCO, FACT, FMCC, FNMA, Goldman Sachs Group Inc. (GS), ITMN, MA, V

This weekend, in my Market Forecast, I said, "...the market has gone quite far, so it may need a breather through the mid-week."  This is what the market is doing right now, basically trading sideways.  Still, there are pockets of new breakouts.  Financials continued to be strong with GS briefly topping over $172 per share, before seeing profit-taking.  MA and V have broken out during the past 3 trading sessions, with MA gaining about $20 since Friday open. 

A report that the government would sell its stake in Citigroup (NYSE:C) inspired a rally in the "bailed out" financial companies.  C added +7.3%; AIG jumped +12.61%; FNM and FRE were up +5.94% and +7.56% respectively.

Elsewhere, AAPL has been making new all-time highs, trading as high as $225 per share today.  BIDU continues to roar, pushing above $544 per share today before settling back to $539.1 for the close.

Biotechs are still hot!  ITMN was halted today as investors await for the recommendation on ITMN's lung drug from the FDA panel.  After the market, ITMN opened above $38 (from yesterday's close of $23.3) with a favorable FDA panel voteFACT jumped more than +67% as ABT agreed to buy it for $27/share!

The Dow was up +11.86 points; SPX added +1.95 points; Nasdaq gained +8.47 points:

Most sectors were little changed.  Commodity sectors were slightly in the red.  Techs outpaced the broader market.

SPX

SPX added +1.95 points to close at 1140.45.  It touched just above 1145 today.  Its daily MAs and MACD went up.

Nasdaq

Nasdaq gained +8.47 points to close at 2340.68.  It went above 2360 today.  Its daily MAs and MACD were also higher.

Nasdaq is already at a new yearly high and has gone up more than 200 points since its recent low in early February.  SPX is still struggling a bit to break above 1150.  This rally seems a bit overheated right now and needs to take time to let off some steam.  Even with CSCO's unveiling of a new, super fast routing system, the market was unable to push too much higher.  Internet sector did make some gains.  CSCO's new CRS-3 routing system has more than 12 times the traffic capacity of the nearest competing system, boasting "up to 322 Terabits per second, which enables the entire printed collection of the Library of Congress to be downloaded in just over one second; every man, woman and child in China to make a video call, simultaneously; and every motion picture ever created to be streamed in less than four minutes."  CSCO shares ended flat today.  With a +5% gain in the past 2 trading sessions, the market had already accounted for the faster product.

So, for now, the market treads water.  Tomorrow, we'll get the latest crude inventory data.  Energy stocks have been lagging, part of the reason why SPX is not rising as fast.  On Thursday, we'll see the latest jobless claims.  If the jobless claims continue to fall, I think we'll see the market rally up to test SPX 1150.

Good night and HappyTrading! ™



Disclosure: positions: none