Last weekend, in my Market Forecast, I wrote:
"For the new week, we'll continue to watch the delicate balance between the dollar and the commodity sectors. Technically speaking, the market can now break higher on a new leg up. This could draw in another chunk of the money sitting on the sideline. We could see the market take a leap to SPX 1050-1100 and Nasdaq 2100-2200. Techs should rise if the market pushes for that new leg up. We'll have to see if the commodity sectors can continue to rebound while the dollar stabilizes."
Indeed, the delicate relationship between the dollar and the commodity sectors dictated the movements on the broader market. All through the week, when the commodity sectors were up, the market was up, and vice versa. On Monday and Tuesday, the the commodity sectors were weak, and, the market fell. On Wednesday, the dollar dropped lower and the commodity sectors strengthened. The Fed left the interest rates unchanged and the market kept most of the advances made in the day. On Thursday, commodity sectors rallied higher, led by the coal stocks, and, the broader market pushed to its highest close since October 2008. On Friday, the dollar rose again, and the commodity sectors came back down, taking the broader market with them. However, SPX managed to close above 1000.
For the week, the Dow was down 48.67 points ; the SPX slipped 6.39 points; Nasdaq fell 14.73 points. This evening, Asian markets are mostly down. The dollar is trading higher. Both gold and oil are lower. Let's see where the market stands after Friday's close:
SPX
On Friday, SPX slipped 8.64 points to close at 1004.09. The daily MAs were up, but, the MACD went down.
Nasdaq
Nasdaq fell 23.83 points close at 1985.52, below its 10-day MA. The 10-day MA flattened and the MACD went lower.
Last week, the market saw some weakness early in the week, but, it came back up later on Wednesday and Thursday, only to sink back into the red on Friday. Financials and techs displayed fatigue and the movements in the commodity sectors dominated the markets. For the new week...
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