First of all, happy Memorial Day!
Last weekend, in my Market Forecast, I said:
"For the new week, we'll have to see how much momentum the bounce on Friday has to carry through. SPX 1110, 1120, and its 10-day MA should provide resistances. The daily MAs of SPX and Nasdaq are well into their new bearish formation. If the market cannot rise above the 10-day MA, the bearish trend should continue to form. So, we'll have to see how strong this bounce will be. The financials will be among the most important sectors to watch. Now that the financial reform bill has been past, there is a little more clarity for the sector. Miners have been beaten down, so, if the market bounces, we should see buyers come into these stocks."
The market did indeed attempt to bounce. If we take out Tuesday mornings big gap down, the market actually had a nice upward bias. Financials dominated the broader market's movements, and, whenever the market moved higher, miners attracted buyers, as forecasted. It was a volatile week, to say the least. On Monday, the market struggled to continue to bounce from the Friday before. On Tuesday, the market slumped at the open to test February lows. However, buyers immediately came in a drove the market back up. Wednesday was much like Monday, struggling to keep the bounce going. Thursday saw the strongest day of the week as China expressed confidence in European debt. Techs rallied solidly, taking Nasdaq green for the year. But, the market lost momentum again on Friday.
It was a very unstable week. However, we wrapped up a nice month, trading on the downside!
For the week, the market ended little changed. The Dow was actually down 56.76 points; SPX added +1.72 points; Nasdaq gained +28 points. Both oil and gold bounced higher. Oil traded back above $74/barrel and gold was above $1200/ounce again. At the time of this writing, Asian markets were mixed. They opened lower, but, some seemed to be bouncing. Let's see how the US market looks after Friday's close:
SPX
SPX lost 13.65 points to close at 1089.41, just below 1090. Its daily MAs went lower.
Nasdaq
Nasdaq fell 20.64 points to close at 2257.04. It closed right at its 10-day MA.
Although the market tried to bounce, it was not able to close above the 10-day MA. VIX did come down from last week's 40+ levels to 32. For the new week...
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