Last Weekend, in my Market Forecast, I wrote:
"For the new week, it certainly looks like the upwards momentum is still with the market. Nevertheless, the market is getting toppier every week. Besides more earnings to come, we also have a FOMC meeting on Wednesday and GDP report on Friday. Most analysts agree that the Fed will keep interest rates at historic lows, and the GDP report is expected to be strong. It seems that the only potential force that can go against the market is the on-going discussion on the financial reform. Techs have risen a lot. It looks like buyers may shift thier attention to the commodity sectors this week. The late buying last week on energy and mining stocks have quickly turn these sectors back up. Techs have emerged as the new leaders in this bull run; so, they should be fine as long as the market stays bullish. To continue going higher, the market will likely have to rely on energy and mining stocks. However, if any unfavorable news come out of the financial sector, this market can still get a quick pullback. As discussed last week, the 10-day MAs will be the first supports."
I'm actually quite amazed by what the charts showed last weekend. Things once again turned out as forecasted. The market was volatile. Earnings and economic news tried to keep the rally going. However, the market was toppy, and news on Goldman Sachs and the financial reform did indeed pressure the market lower. We saw the market did a quick drop on Tuesday, as financials led the decline. We were on FAS and NFLX puts with calls on gold plays, and were glad to pocket gains on both sides. Wednesday and Thursday demonstrated the market's resilience to stay up, as Fed and the latest jobs data helped the market's bounce. But, on Friday, possible criminal charges on Goldman Sachs spooked the market again! Investors ran to gold plays for cover, and we locked in more gains on our calls on GOLD. It was a difficult market environment to manuever. You could hardly keep a position overnight, besides gold plays, which pushed higher steadily.
For the week, the Dow was down 195.67 points; SPX fell 30.59 points; and Nasdaq lost 68.96 points. Both oil and gold went higher. Gold traded around $1180/ounce and oil climbed above $86/barrel. This evening, at the time of this writing Asian markets were mixed, while gold and oil were little changed. Let's see how the US market looks after Friday's close:
SPX
On Friday, SPX lost 20.09 points to close at 1186.69. It closed just below the 30-day MA. The MACD sloped down.
Nasdaq
Nasdaq fell 50.73 points to close at 2461.19. It closed just above the 30-day MA. Its MACD turned down.
Both SPX and Nasdaq had basically fallen to their respective 30-day MAs. VIX jumped back to 22. For the new week...
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