Hope you are all having a very restful holiday season!
The markets went through Christmas with very light trading and not much changes. Last weekend, I wrote:
"For the new week, I think techs can start leading the market. We'll be looking for the semiconductors and the biotechs for clues. With the bullish formation being established in the market indices, we could see the market bring on a "Santa Rally"! Of course, we'll need to see the financials participate. Metals and miners (XME) should also be important components."
Well, we did not get a "Santa Rally", as both SOXX and BTK went lower for the week. The financials also did not show any much strength. The Dow was down 63.56 points; SPX lost 15.08 points; and Nasdaq fell 34.08 points:
SPX
SPX closed at 872.80, losing 15.08 points for the week. Its daily MAs and MACD were flat.
Nasdaq
Nasdaq fell 34.08 points and closed at 1530.24. Its daily MAs and MACD flattened.
The market really didn't show much energy at all. Most traders seemed to be away on vacation. The daily MAs and MACD on the major market indices flattened out, as the market traded in a very tight range. For the new week, the market starts in a very precarious position. Although the market did not change much, the small drops that it took was enough to push both SPX and Nasdaq below the 10-day MA. With the MACD flat, the market could go in either direction. VIX went lower and closed below 45, but, the market did not show any strength. We'll have to wait for clearer signals. Meanwhile, gold seems to be picking up some momentum...
Sector Watch
GLD (gold)
GLD closed higher last week and it's looking like it wants to test $88 soon. Breaking above $88, GLD could really take off!
SLV (silver)
SLV closed almost flat. Although not as strong as GLD, it is still showing a bullish phase. PAAS just almost +7% on Friday and could break out soon.
USO (oil)
USO lost more grounds last week, closing just above $29. USO is a relatively new ETF and it is trading at its lifetime low! The charts are still very bearish for USO, and, it is threatening to start a new leg lower.
XLF (financials)
XLF still could not find any consistent strength. It closed below its daily MAs and it is in jeopardy to be pushed lower.
With not much volumes, the markets are showing lethargy and undecidedness. It is perhaps a nice time to get some rest until after the New Year's. We'll need to get clearer signals from the markets. The daily MAs and MACDs are flattening out. On one hand, they may demonstrated uncertainty; on the other hand, they could be signaling big moves on the horizon.
Happy Holidays!
