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Happy New Year! Hope you've had some nice time off with your friends and family!
The market was very strong last week, and was finally able to get some traction. The Dow added +519.14 points; SPX gained +59 points; Nasdaq jumped +101.97 points. I have been trading much less and on a slower rhythm, but, did catch some very good trades last week:
12:06 | HappyTrading TLT ($116.80) Sold to Close TTJMP Jan 120 put, at $4.80 +23%
12:04 | HappyTrading ICE ($84.60) Sold to Close ICEAP Jan 80 calls, at $7.40 +51%
12:03 | HappyTrading FSLR ($151.50) Sold to Close QHBAH Jan 140 calls, at $16.30 +99%
01:00 | HappyTrading PCLN ($73.70) Sold to Close PUZAN Jan 70 calls, at $5.50 +45%
11:06 | HappyTrading ICE ($82.70) Sold to Close ICEAP Jan 80 calls, at $6.70 +37%
07:23 | HappyTrading PCLN ($72.30) Sold to Close PUZAN Jan 70 calls, at $4.80 +26%
Since the market landscape has drastically changed in the past few months, I have been modifying my trading strategies. It seems to work much better not to trade everyday, but, have patience and wait to catch the best opportunities. Also, I am mixing in more pure stock trades. Since the market has been very volatile, sometimes pure stock trades can help calm the nerves, and help slow down the trading rhythm, which in turn, can help preserve capital, while at the same time help eliminate the feeling that you might miss a good opportunity (boy, that was a long "run-on" sentence!). You can see the published trades on our Home Page under the Happy Trades Live section, for instance:
You may not see all of the trades because some of these trades were published "privately" and will only be visible to those who subscribed to our Premium Services. My published trades are also listed on the HappyTrading Happy Trades!! Page, which is updated once every couple of weeks.
Last weekend, in my Market Forecast, I wrote:
"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..."
The market went lower on Monday and tested the daily MAs. It was able to hold the support and rally higher. Gold was strong and continued to make new gains. We waited for clearer signals and made the trades mentioned above as the market got stronger. Let's take a look to see where things stand:
SPX
On Friday, SPX added +28.55 points to close at 931.8. It has caught up with its daily upper BB. The MACD went up.
Nasdaq
Nasdaq jumped +55.18 points to close at 1632.21, above the 1600 level. It also caught the daily upper BB. Its MACD was higher as well.
The market has turned the corner! The 30-day MA (black line) is now turning higher. The major indices have caught up with their respective daily upper BBs. Both SPX and Nasdaq closed above their immediate resistance levels: SPX 900 and Nasdaq 1600. The market is now looking stronger. One important factor this past week was that oil rebounded and the energy sectors rallied. The financials were strong too with GS gaining more than $10! For the new week, the market certainly has some bullish momentum behind it now. After 3 days of straight gains, the intraday charts of the major market indices seem a bit topped out. So, we'll have to be a little careful early in the week. The market may need to breathe a little. It does look like many sectors are ready to go higher though, and, the market itself has a lot of room to go up.
Sector Watch
GLD (gold)
GLD went higher again last week. It still needs to break that $88 resistance level first, before going higher.
USO (oil)
USO finally bounced last week, as geo-political events drove speculators back into the market. It is right at the decending 30-day MA. The next resistance level above the 30-day MA is between $40-$45.
XLF (financials)
XLF also did well, closing above its daily MAs. Its 30-day MA has turned higher. I look forward for it to break the resistance at $13 and catch the daily upper BB to sail higher. $15 is another resistance. GS has been very strong. I also like WFC. MA could be ready to break out if it goes above the resistance at $150.
SOXX (seminconductors)
SOXX closed above its daily MAs and has pushed the daily upper BB open. The MACD has curved higher again. The semiconductors will be very important for the market recovery.
BTK (biotechs)
Similar display on BTK's chart. New bullish formation on the daily MAs is extending with the MACD going higher. DNA, CELG, GENZ, AMGN, THOR are some of my favorites.
Let's if the market can continue the strong 2009 start this week!
Good night and HappyTrading! ™
