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Market Closes Higher Ahead of Yellen's Congressional Testimony

Stocks in this article: SPY GLD INTC COP WWAV SWN OIL

NEW YORK (TheStreet) -- The four major U.S. stock indices closed higher Monday in one of the lowest trading volume days in 2014.

The DJIA was higher by 111.61 points to close at 17055.42 and the S&P 500 rose by 9.53 to finish at 1977.10. The Nasdaq finished up 24.93 at 4440.42 while the Russell 2000 closed higher by 5.69 points at 1165.62.

The S&P 500 Trust Series ETF (SPY) volume finished at 57.3 million shares. So the up move in the indexes is being offset by the no-volume trading. There is simply no buying conviction on the upside.

So the markets wait for Federal Reserve Chair Janet Yellen and her Humphrey-Hawkins testimony before Congress on Tuesday and Wednesday. I fully expect her to maintain her dovish stance as far as Fed policy is concerned. This should continue to put a floor under this stock market and limit any big downside moves.

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Gold had some nice profit taking today as the SPDR Gold Trust (GLD) was down 3%. This is nothing more than profit taking from an overbought signal within a "Trend Bullish" condition. Gold may very well head higher after another day or two of profit taking. The dovish Fed stance should propel gold higher as it approaches an oversold signal.

As I mentioned Friday, the indexes were sufficiently oversold enough to have a stock market rebound this week. That is indeed what happened in Monday trading. The question now becomes, do we get lower highs in the indexes as we move forward this week?

On Tuesday Intel (INTC) reports earnings after the close of trading. I want to mention one interesting fact about INTC: The weekly algorithm number, according to my internal process, is flashing an extreme overbought signal. The weekly is a trend indicator of a longer duration than the daily number. Whatever earnings number that INTC reports may be irrelevant to the longer time frame.

This is just some information to keep on your radar screen as the next few weeks unfolds. INTC can very easily move higher over the short term but the longer-term, three weeks or more, I expect INTC to head lower as the weekly algorithm numbers supersedes the daily number.

Thus, we continue to trade opportunistically. Our internal algorithm trading numbers have been pristine for us since going public for the world to see on July18, 2013. Being a bull or bear is not of any relevance to us. We let the numbers be our guide. Again, this can all be found at

During trading on Monday we closed our long positions in ConocoPhilips (COP) and WhiteWave Foods (WWAV) that were initiated at the close of trading on Friday. Both for very nice gains. We started a new long position in Southwestern Energy (SWN) that is extreme oversold according to our numbers. We are still long (OIL).

At the time of publication the author was long OIL and SWN.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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