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Last weekend, in my Market Forecast, I said,
"For the new week, the market is on very shaky grounds. The market indices have been sliding lower on their daily lower BBs. The daily MAs and MACD have turned lower. All eyes will once again be focused on the financials, which slipped to new lows last week. Unless we get positive development and infuses some confidence back into the financials, it will be difficult for the market to find strength."
The market was very volatile. And, in the end, the selling pressure was just too great to overcome. The market indeed slid lower. During the week, we talked about the importance of the resistance levels for SPX and Nasdaq (SPX 780; Nasdaq 1450). The market tried to break above, but, broke down on Thursday. We also saw biotechs and health cares drop precipitously, as Obama's budget plan may exert some pressure on these sectors.
The Dow finished the week down 302.74 points. SPX lost 34.96 points. Nasdaq dropped 63.39 points. We wrapped up the month in flying colors though, as we continue to adjust our trading strategies to fit the flow of this volatile market.
Let's see where the markets stand:
SPX
On Friday, SPX fell 17.74 point to close at 735.09. Its daily MAs and MACD continued to go lower.
Nasdaq
Nasdaq lost 13.63 points to close at 1377.84. Its daily MAs developed a new bearish formation. Its MACD went lower.
Both SPX and Nasdaq broke down last Friday. SPX could not penetrate above 780 and Nasdaq finally broke below 1400. Asian markets are trading substantially lower this evening, as more distressing news on the global economy and financial institutions were released, including AIG receiving up to another $30 billion from Fed. For the new week...
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