Market Closes Higher Ahead of Yellen's Congressional Testimony

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?

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