Last weekend, in my Market Forecast, I said,
"For the new week, the market will start out with a slightly weaker stance. However, if the market can hold its support levels (SPX 1025; Nasdaq 2050), the market can bounce right back up. The market will need to stay strong right from the beginning. Earnings season is kicking off next week. Among the notable ones is AA, which reports next Wednesday after the market close. Metals and mining is a very important sector for the broader market, and, AA's earnings can certainly affect this whole group. Financials is the other group to watch, and GS still looks strong."
Indeed, the market was strong right from the beginning and held its support levels. It spent the whole week "bouncing right back up"! Both the miners and financials helped to lead the market higher. AA reported a "surprise profit" and GS gained nearly $10 for the week! On Monday, the commodity sectors and the financials got things going early. On Tuesday, gold charged up to a new record high and we booked big wins with AEM. On Wednesday, financials kept on going and big tech names joined in, including GOOG, which jumped almost $20 for theday! On Thursday, energy stocks and miners continued their rally with gold piercing above $1050/ounce. On Friday, the market sectors were mixed as predicted, but, the major market indices still closed in the green, finishing off a very nice week (click here to see published trades)!
For the week, the Dow closed up +377.27 points; SPX added +46.28 points; Nasdaq gained +91.17 points. Gold made record highs and closed around $1050/ounce. Oil went up as well, closing above $70/barrel. The dollar dropped, but, managed a bounce on Friday. At the time of this writing, Asian markets were mixed, but, mostly hovering around the flatline. The Chinese market reopened after being closed for a week, and was trading higher. Let's see where the US market stands after Friday's close:
SPX
On Friday, SPX added +6.01 points to close at 1071.49. Its daily MAs and MACD went higher.
Nasdaq
Nasdaq gained +15.35 points to close at 2139.28. Its daily AMs and MACD turned up.
Both SPX and Nasdaq have climbed back to where they fell on a quick dive after the disappointing job reports last week. The daily MAs and MACD have turned up again. VIX has fallen below 25 and is testing 23. For the new week, the earnings reports are going to be the driving force. The market has run up for 5 consecutive days and may need to rest and trade sideways to start the week. INTC and ALTR will report after the market on Tuesday. On Wednesday, JPM kicks off earnings for the financials in the morning. On Thursday, bellwether companies such as GS, IBM, and GOOG will report. On Friday, GE, BAC, and HAL will wrap up for the week's earnings. The market seems to be bullish about this earnings season. Financials and techs should be the focus this week, and both are looking strong. To push higher, the market will need to catch the daily upper BBs (SPX 1080; Nasdaq 2150), which happen to be the recent resistance levels. Oil is becoming stronger and gold has room to push higher.
Sector Watch
USO
USO closed above $37 last week. Its 10-day MA has turned higher. The MACD is also in a bullish phase. USO can go higher from here to test the resistance at $38.5. This could give the energy stocks some more momentum. Oil services have been really strong.
UUP (dollar)
The dollar fell further last week, but, managed a bounce on Friday. It is still looking bearish and should find some resistance at around $22.75 to $22.8. $22.6 is still the support to break.
GLD (gold)
GLD went up strongly last week and recorded a new all-time high above $104. It took a rest on Friday as the dollar bounced. This rise is very steep and if it pushes above $104, it can jump higher pretty fast. We'll see how the dollar does on Monday. Gold and silver miners also went higher last week. PAAS has broken out again, but, most gold miners are still below their recent highs.
XLF (financials)
XLF closed above the $15 level last week. This is bullish. Going above $15.5 should give its daily MAs a new bullish phase. With JPM, C, GS, and BAC reporting in the new week, the financials are going to be very important. BAC looks to be in a very good position, and with it reporting on Friday, it gives us some time to figure out our plays.
INX2 (internet)
INX2 is looking strong ahead of GOOG's earnings on Thursday. It has caught up with its daily upper BB. Its daily MAs curved up again and ready to extend their bullish phase. The MACD is just starting a new bullish crossover. PCLN, AMZN, GOOG are among the favorites in this space.
Good night and HappyTrading! ™
