Today’s stock market offered similar action to that of yesterday. Stocks began the session weaker and then over the course of the day trended modestly higher. Today’s rough start once again came on concerns over potential European debt problems. However, today’s much-better-than-anticipated jobs report from ADP helped provide lift for equity prices. The NASDAQ Composite Index fared best with a gain of 0.81%. The Standard & Poor’s 500 Index closed at 1281.06, up 0.29%, but still remains below its late October closing high of 1285.09. The Dow Jones Industrial Average closed virtually unchanged, down about 3 points. The NASDAQ Composite Index now joins both the S&P 500 and the Dow Industrials above the 200-day price moving average, albeit just barely.

As one would surmise, it was a mixed day for the blue-chip components. However, the financials were clear standouts. Bank of America (BAC) and JPMorgan Chase (JPM) led the DJ-30 with gains of 8.61% and 2.09%, respectively. The SPDR Select Sector Financial ETF (XLF) closed up 1.35%. Other top Dow performers today were Walt Disney (DIS), up 1.67%, American Express (AXP), up 1.16% and Intel Corp. (INTC), up 1.15%. Blue-chip laggards were Boeing Co. (BA), down 1.08%, Chevron Corp. (CVX), down 0.98%, United Technologies (UTX), down 0.96% and Alcoa Inc. (AA), down 0.95%. The U.S. Dollar surged higher today as the Euro dove. The PowerShares DB US Dollar Index Bullish Fund (UUP) gained 1.07%, while the CurrencyShares Euro Trust (FXE) hit another new low, down 1.17%. Our thirty main Morningstar industry group averages were split down the middle today. The best performing groups were Automotive (MG330), Electronics (MG830), Real Estate (MG440), Computer Software & Services (MG820) and Media (MG720). The worst performers were Metals & Mining (MG130), Transportation (MG770), Telecommunications (MG840), Aerospace (MG610) and Food & Beverage (MG340).

Following the long holiday weekend stocks started higher this morning before hitting a speed bump thirty minutes into trading when the Conference Board released its consumer confidence index for December. Although the index climbed to 64.5, its highest level since April, exceeding consensus estimates of 60, the major averages pulled back from their 10 a.m. highs. Following an hour-long price dip, stocks got back on track to the upside for most of the day, but final hour selling pressure turned the major stock indices mixed. As to be expected, trading volume was very light in today’s session.

 The Standard & Poor’s 500 Index closed at 1,265.43, up just 0.01%. The Dow Jones Industrial Average dipped ever so slightly to close down 2.65 points or 0.02%. The NASDAQ Composite Index continues to test its 50-day price moving average. The index picked up 0.25% today. The Dow Jones Utility Average has hit another new multi-year high.

 Financials were the biggest drag on the Dow Industrials. The SPDR Select Sector Financial ETF (XLF) closed on its session low, down 0.61%. Bank of America (BAC) fell 2.14% and JPMorgan Chase (JPM) was down 1.61%. Other blue-chip losers included General Electric (GE), down 1.21%, Hewlett-Packard Co. (HPQ), down 0.89% and Alcoa Inc. (AA), down 0.79%.

 Although the stock market had a very good week last week and the Dow Industrial Average now stands at the very top of its recent trading range and just below Friday’s new multi-month high, I believe the market finds itself at a critical juncture. Technically, there are a number of potential obstacles in this area which will serve to test the strength of this rally. What doesn’t kill it may very well make it stronger, but just like an airplane needs forward speed to create and maintain lift, I feel this market needs to keep the upside momentum going here or it will be in imminent danger of falling back.

Stocks moved lower during the first half of the day, but then trended modestly higher throughout the afternoon. The S&P 500 and the Dow Industrials managed to post a small gain on the day, but the NASDAQ market being dragged lower by a weak technology sector, closed down about 1%. The Dow Jones Industrial Average formed a symmetrical “V” pattern with today’s intraday trading, finishing the session almost exactly where it started.

 With the Industrials having been down over 100 points earlier in the session the market showed a decent recovery to erase the losses, but didn’t offer anything impressive in terms of a follow through to yesterday’s big gains. The DJ-30 found support today almost right at the 12,000 level.

 One of the catalysts creating a drag on stocks today, especially technology and the NASDAQ, was Oracle’s (ORCL) negative earnings surprise. The company reported its latest earnings after yesterday’s close and it was the first time in a decade ORCL’s numbers fell short of Wall Street’s forecasts. ORCL gapped sharply lower on this morning’s open and closed down 11.66%.

 The Standard & Poor’s 500 Index closed at 1,243.72, up 0.19%. The Dow Jones Industrial Average gained a mere 4 points today or 0.03% to close at 12,107.74. The NASDAQ Composite Index pulled back 1% today and the NASDAQ 100 Index lost 1.44%. Both NASDAQ indices remain below their respective 50-day price moving average.

 A number of today’s leading gainers in the S&P 500 currently display some enticing chart patterns: Cintas Corp. (CTAS), up 9.30%, Yahoo! Inc. (YHOO), up 5.82%, Constellation Brands (STZ), up 4.45%, J.C. Penney Co. (JCP), up 3.50%, Weyerhaeuser Co. (WY), up 3.46%, Amgen Inc. (AMGN), up 3.24% and Nike Inc. Cl. B (NKE), up 2.91%.

 S&P 500 stocks down the most today and looking bearish on the charts are Oracle Corp. (ORCL), down 11.66%, Citrix Systems (CTXS), down 7.76%, F5 Networks (FFIV), down 6.64%, Cognizant Technology Solutions (CTSH), down 6.14%, Teradata Corp. (TDC), down 5.51%, Emerson Electric (EMR), down 5.44%, Salesforce.com (CRM), down 5.07% and Red Hat Inc. (RHT), down 5.02%.

Stocks extended their slide today closing lower for a third straight session. The primary concern continuing to plague Wall Street is, of course, the European debt crisis and its detrimental impact on the global economy. There is a growing perception among investors that a recession in Europe is unavoidable and this is obviously hurting sentiment. The sinking Euro is a clear signal of the deteriorating confidence in the EU’s ability to right the ship and suggests the situation in the euro zone will likely get worse before it gets better.

 The CurrencyShares Euro Trust ETF (FXE) closed today at another new 11-month low, while the recent upside breakout in the PowerShares DB US Dollar Index Bullish Fund (UUP) confirms the current strength of the Dollar versus the Euro. Furthermore, I think both of these ETFs suggest the bearish Euro/bullish Dollar scenario will continue.

 The Standard & Poor’s 500 Index moved down through its 50-day price moving average today declining 13.91 or 1.13% to close at 1,211.82. The Dow Jones Industrial Average fell a little more than 131 points or 1.10% to close at 11,823.48. The DJ-30 slipped below its 200-day price moving average today and is now testing its 50-day moving average. The NASDAQ Composite Index dropped 1.55% and the Russell 2000 Index closed down 1.34%.

 There were a few relatively big decliners among today’s blue-chips. Caterpillar Inc. (CAT) fell 4.37% after having failed on three separate occasions at its 200-day price moving average during the past seven weeks. CAT has now violated its 50-day moving average and is testing last month’s low. Walt Disney (DIS) lost 3.22% today and is fast approaching a test of its 50-day price moving average. Chevron Corp. (CVX) moved down through both its 50-day and 200-day moving average today. CVX closed down 2.98%. Cisco Systems (CSCO) settled right on its 50-day moving average after the stock fell 2.65%. Both Merck & Company (MRK) and General Electric (GE) bucked the trend today logging gains of 1.63% and 1.16%, respectively.

 Energy was one of the worst performing sectors of the day. The SPDR Select Sector Energy ETF (XLE) closed down 2.81% and the HOLDRS Oil Service ETF (OIH) lost 3.66%. Energy (MG120), which declined 2.73% today, was the biggest loser among our thirty main Morningstar industry group averages.

 Gold and silver prices plummeted today as investors seemingly continue to take profits in the areas they have profits to take. The SPDR Gold Trust (GLD) plunged through its 200-day price moving average for the first time in nearly three years. GLD fell 3.51% today and is now down 8.12% over the past three sessions. The iShares Silver Trust ETF (SLV) dropped 5.87% today and is approaching a test of the late September low.

Investor optimism surrounding the European Union deal struck on Friday faded today resulting in selloffs in both the U.S. and European stock markets. Some investors fear last week’s agreement may not be enough to effectively end the European debt crisis. Most believe even though Europe is finally moving in the right direction it will take time to turn things around making it very difficult to avoid a European recession. 

Moody’s Investors Service today said the agreement was “insufficient to reduce the odds of sovereign ratings downgrades in the euro region in the short to midterm.” Fitch Ratings said “the inability by European Union leaders to devise a comprehensive fix to the region’s debt crisis had intensified pressure on debt ratings of euro-area nations.”

 Tech giant Intel Corp. (INTC) also weighed on today’s market. The stock dropped 4% after issuing a sales warning. Intel said its results were being affected by supply shortages in computer hard-disk drives. Flooding in Thailand causing many disk-drive makers to relocate is the culprit behind the supply problems. Almost half of the world’s disk-drives come out of Thailand.

 The Standard & Poor’s 500 Index fell 18.72 or 1.49% to close at 1,236.47. The Index continues to fluctuate between its 20-day and 200-day moving average. My five month downtrend line and the 200-day price moving average remain a ceiling for the S&P 500.

 The Dow Jones Industrial Average trimmed its losses during the final hour to close above the 12,000 level, but was still down about 163 points or 1.34%. The DJ-30 tagged its 200-day price moving average where it found support at today’s session low.

 The NASDAQ Composite Index lost 1.31%. The Russell 2000 Index declined 1.64% and the broad-based DJ Wilshire 5000 Composite Index fell 1.51%. The 50-day price moving average is currently a level of overhead resistance for all three of these indices, as well as for the S&P 500.

 Only two of the thirty blue-chip stocks finished the day in the green. They were McDonald’s Corp. (MCD) and Walt Disney (DIS), which closed up 0.46% and 0.25%, respectively. The biggest Dow losers were Bank of America (BAC), down 4.72%, Intel Corp. (INTC), down 4.04%, JPMorgan Chase (JPM), down 3.44%, Alcoa Inc. (AA), down 3.01% and Caterpillar Inc. (CAT), down 2.84%.

 The U.S. Dollar and the Treasury bond market both rallied today as the Euro fell. The PowerShares DB US Dollar Index Bullish Fund (UUP) closed up 1.04% and the Rydex CurrencyShares Euro Trust ETF (FXE) dropped 1.36%, closing at a new 11-month low. The iShares Barclays 20+ Year Treasury Bond Fund (TLT) was up 1.11%.

 Gold and silver declined today with the SPDR Gold Trust (GLD) falling 2.65% and the iShares Silver Trust ETF (SLV) closing down 2.68%. Steel stocks moved lower today as well. Metals & Mining (MG130) was today’s worst performing industry group average losing 3.53%.

 Other poor performing groups were Banking (MG410), down 2.98%, Energy (MG120), down 2.54%, Electronics (MG830), down 2.51%, Insurance (MG430), down 2.38%, Conglomerates (MG210), down 2.24% and Chemicals (MG110), down 2.20%.

Investors appeared somewhat conflicted today in terms of what direction they wanted to take the stock market. Judging by today’s action in equities, it was something of a tug o war between the bullish impact of this morning’s surprisingly strong employment report and investors’ reluctance to make new buying commitments ahead of the weekend. The unemployment rate fell to 8.6% from 9%, marking a new 2 1/2 year low, but in the end it wasn’t enough to extend this week’s rally. 

The market began the day higher, but peaked about one hour into trading. The Dow Industrials were up as much as 126 points early, but over the course of the day gave it all back. By the final bell the major averages were completely flat–virtually unchanged for the day.

 The real story was not what happened today but rather what happened this week. It was the second biggest weekly point gain ever for the Dow Jones Industrial Average, which soared nearly 788 points. Yes, stock prices flattened out to finish the week, but perhaps this was merely a function of a market in need of some consolidation. Stocks essentially went nowhere on Thursday and Friday, but they didn’t go down. The market successfully held onto the spectacular gains achieved earlier in the week.

 The Standard & Poor’s 500 Index climbed over 85 points this week or 7.39%. The Dow Jones Industrial Average jumped 7.01%, the NASDAQ Composite Index was up 7.59% and the Russell 2000 Index gained an impressive 10.34%. Another major average we don’t often mention is the Dow Jones Transportation Average, which advanced 9.12% this week.

 Needless to say, all thirty components of the Dow Industrials logged a healthy gain for the week. Almost two-thirds of them were up more than 7%. The top performers were Boeing Co. (BA), up 13.57%, JPMorgan Chase (JPM), up 13.52%, Caterpillar Inc. (CAT), up 11.04%, Alcoa Inc. (AA), up 10.73%, Chevron Corp. (CVX), up 10.19% and Home Depot (HD), up 9.51%.

 The best performing Morningstar industry group averages for the week were Banking (MG410), Metals & Mining (MG130), Automotive (MG330), Manufacturing (MG620), Internet (MG850) and Energy (MG120).

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