This weekend is a triple holiday weekend! Happy Valentine's Day, Happy Chinese New Year, and Happy President's Day!
Hope you've had a wonderful weekend!
Last Sunday, in my Market Forecast, I wrote:
"For the new week, the market could stage a bounce and bounce off of SPX 1060. Whether or not the bounce is meaningful will depend on if SPX can bounce above its 10-day MA, and then, SPX 1120 (the next resistance). If SPX 1060 does not hold, we could see the market test SPX 1040 before bouncing. So, how the market opens on Monday will be very important. The dollar is very strong, but, perhaps needs a breather. Commodity sectors could see buyers rushing in if the dollar pulls back. Financials are on the verge of breaking lower, so, we'll have to monitor them carefully."
Indeed, the market did stage a bounce. The commodity sectors jumped as the dollar pulled back. It was not until Friday when the Chinese government announced a second lending tightening that they dollar recovered most losses. But, still, the dollar ended slightly lower. However, SPX was not able to close above its 10-day MA. Financials were still weak and closed flat. On Monday, the market opened strongly, but, faded in the afternoon. On Tuesday, Europe pledged help for Greece and commodities led the market higher. On Wednesday, the market stuttered and closed flat. On Thursday, China reported a softer CPI and the commodity sectors rallied higher. On Friday, as China tightened lending for the 2nd time in a month, the market opened lower; but, it was able to regain its footing before the close.
Again, we took easy on the trading this week and only closed a few trades:
12:30 | HappyTrading ICE ($100.00) Sold to Close IHH02C100 Feb 100 calls, at $1.80 +13%
11:24 | HappyTrading ICE ($100.25) Sold to Close IHH02C100 Feb 100 calls, at $2.00 +25%
08:46 | HappyTrading GLD ($106.70) Sold to Close 03C108 Mar 108 calls, at $2.35 +7%
For the week, the Dow added +86.91 points; SPX added +9.32 points; Nasdaq gained +42.41 points. Both oil and gold went higher. China, Hong Kong, and Taiwan markets are all closed this week for Chinese New Year. At the time of this writing, Nikkei was higher. Gold was breaking above $1100. Oil was flat. Let's see how the US market looks after Friday's close:
SPX
SPX slid 2.96 points to close at 1075.51. It closed right at its 10-day MA. Its MACD glided up.
Nasdaq
Nasdaq added +6.12 points to lcose at 2183.31. Its 10-day MA and MACD went higher.
Technology stocks were much stronger than the broader market. Nasdaq closed above the recent support level of 2150 and also closed above its 10-day MA. SPX, however, had a much harder time. It still was not able to close above the 1080 level and closed right at its 10-day MA. VIX came down to close below 23. For the new week...
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