Last weekend, in my Market Forecast, I said:
"For the new week, with both SPX and DJI ending below major support levels (SPX 1080 and DJI 10,000), the market can see additional selling pressure. Energy sectors still look weak, with oil spill in the Gulf looking to extend into the fall, although the containment cap is capturing some of the leaking oil. Techs are doing better than the broader market. Although Nasdaq also closed under its daily MAs, it is still about 70 points above the recent low. On the downside, if SPX closes below 1040, 1025 is the nearest support."
Indeed, the market slumped lower on Monday. On Tuesday, SPX went down to test that 1040 level, but bounced in the afternoon. On Wednesday, the market rallied higher in the morning, but, lost the gains in the afternoon. On Thursday, better economic data brought the buyers back in, and this time, the market continued higher until the close. Friday was flat for most of the day. A late rally pushed SPX to close above 1090! We positioned ourselves well ahead of the jobs report on Wednesday and finished another week with some very nice trades!
For the week, the Dow was up 279.1 points; SPX added +26.72 points; Nasdaq gained +24.43 points. Gold set a new all-time high on Tuesday, but had a immediate pullback. It closed the week just a bit higher at around $1230/ounce. Oil climbed higher to around $75/barrel. At the time of this writing, Asian market were mostly higher tonight. Let's take a look at the US market:
SPX
On Friday, SPX added +4.76 points to close at 1091.6. It closed above its 20-day MA. Its MACD went higher.
Nasdaq
Nasdaq gained +24.89 points to close at 2243.6, right at its 20-day MA. The MACD was up.
Both SPX and Nasdaq are basically testing the 20-day MA. VIX closed below 30 on Friday. For the new week, things may be a bit tricky. First of all, it's options expiration week, so some "maneuvers" are to be expected. The market is definitely trying to draw a bottom. But, after charging higher 2 days in a row, we may see some indecisiveness on Monday. If the market can hold its altitude on Monday, the market may test SPX 1100 to 1120 area. Oil services did bounce with the broader market last week, but they are still weak. Financials have been lagging lately. If the market were to rally higher, we'll need to see some strength in the financials.
Sector Watch
XLF (financials)
XLF tested the $14 level last week and was able to bounce back to close above. GS plunged to a new 52-week low and almost touched $131. It did bounce back to close above $135. This market will need some good news in the financial sector to go higher from here. XLF still needs to go above $15 to turn bullish.
GLD (gold)
GLD made a new all-time high last week, going above the $1250 mark. But, it pulled back immediately, just like last time. However, it still managed to close above $120. I'd be watching for GLD to rally again in the new week. If it gets above $122, we should see a new breakout. Once again, gold miners are more dangerous and will likely need a bullish market environment to push higher. NEM, ABX, GOLD are still among the favorites.
XME (metals and mining)
XME bounced strongly last week. CLF and BHP were especially strong. XME has a resistance at $52. Getting above this level, XME should turn bullish.
OIH (oil services)
OIH finally some some bounces. BP, APC, RIG had 2 nice days at the end of the week. However, OIH still looks very weak. A slip below $95 could invite a test to $90 again. If this sector continue to bounce, $100 should not be too much of a resistance. $105 is the level to watch on the upside.
If the market continues to rally, techs should see buyers. I'll be looking at AAPL for clues.
Good night and HappyTrading! ™ 
(click to see our Facebook Page)
