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Last weekend, in my Market Forecast, I wrote:
"The market is now again at support. Breaking blow the daily MAs could easily push the market lower, and perhaps to test the Nov 2007 bottom. VIX has risen back above 40 and could test the resistance at 44-45 again. SRS and SKF have been strong (mentioned last Thursday), which are bearish signs for the market. The coming new week could be the test for this little rally that started during the holidays."
Indeed, the market was pretty weak. On the other hand SRS and SKF just kept limbing higher. It was not until Thursday afternoon, when the expectation of a stimulus plan being introduced prompted the market to bounce. On Friday, we saw strength in techs as Obama's inauguration comes after the long weekend.
For the week, the Dow lost 349.8 points; SPX dropped 40.23 points; Nasdaq fell 42.26 points:
SPX
On Friday, SPX added +6.38 points to close at 850.12, just above the 850 level. The daily MAs and MACD slid.
Nasdaq
Nasdaq gained +17.49 points to close at 1529.33. It closed below its daily MAs. The MACD was lower.
The market is in a very defensive position and could easily head lower to test the bottom. For the new week...
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