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Market Forecast + Sector Watch: SPX, Nasdaq, USO, XLF, XME, XLE, PBW (public)     

Last weekend, in my Market Forecast, I wrote:

"For the new week, the market still looks very vulnerable.  The market would have to overcome a lot of downside pressure to push higher.  Goldman Sach's (GS) earnings on Tuesday morning could decide the market's near-term fate."

Indeed, GS earings turned out to a dominant force.  On Monday, stocks jumped as an analysts upgraded GS, and the market tone started to shift towards more bullish.  We cashed out our puts on POT at a good profit and started our bullish plays.  On Tuesday, both GS and INTC delivered good earnings and the market continued higher.  We cashed out winnings on BIDU for a +120% profit.  On Wednesday, things just kept going up, and we locked in more profits.  On Thursday, both GOOG and IBM beat earnings estimates.  Although GOOG slid lower, the overall market stayed strong.  Friday was options expiration day.  Things fluctuated, but, were mostly flat.  IBM soared almost $5 to close above $115.  We ended a very nice week with 100% of our published trades closing in profits.

For the week, the Dow was up +621.84 points; SPX added +61.25 points; Nasdaq jumped +130.58 points.  Just a week ago, the market looked like it was going to turn down.  But, with bellwether companies beating earnings estimates, the market has turned bullish once again!  Both SPX and Nasdaq are testing the high end of their respective, recent, trading ranges, with Nasdaq closing just above its recent high.  Financials and techs sparked the market's engines.  Commodity-related sectors, especially miners, also bounced.  Let's see how the market looks after Friday's close:

SPX

On Friday, SPX slid just 0.36 points to close at 940.38.  Its 10-day and 20-day MAs curved up.  The MACD was also higher.

Nasdaq

Nasdaq added +1.58 points to close at 1888.61.  Its daily MAs and MACD went higher.

After charging up, basically, 5 days straight, the broader market now carries a bullish tone.  Of course, earnings season has just started and we still have to get through a lot of quarter results.  Asian markets this evening are trading flat to mostly higher.  For the new week...

To read the rest of of this article, please subscribe to HappyTrading "Premium Articles" by going to the Premium Services (click here) page.  If you are already a subscriber, please click here: Market Forecast 7/20/09.


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