Last weekend, in my Market Forecast, I wrote:
"For the new week, this week is still range-bound with a bearish bias. The longer the market hangs below SPX 1080, the more likely we'll see SPX test 1040 soon again. However, if the market rises above 1100, we'll likely see a new bullish formation in SPX's daily MAs. In order for that to happen, we'll need to see some strong leaders on the market. Financials, especially, will need to be strong."
Indeed, the market tried to hang around 1080 on Monday, but, could not break above that level. On Tuesday, the market gave in to the selling pressure and went straight down to test 1040. On Wednesday, the market tried its best to stay above 1040, but, experienced more selling in the last hour to close below 1040. On Thursday, the selling momentum pressed the market lower in the morning and SPX touched 1010 before bouncing back a bit. On Friday, the market traded sideways and ended slightly down. With the fast selling in the past 2 weeks, the market ended June lower again. However, we traded with the market and caught some nice trades on both sides.
For the week, the Dow was down 457.33 points; SPX fell 54.18 points; Nasdaq stumbled 131.69 points. Gold took a big tumble this week coming back to the $1200 level. Oil also fell, sinking down to just above $71/barrel. Tonight, at the time of this writing, Asian markets were mostly bouncing higher. Here's how the US market looks after Friday's close:
SPX
SPX slid 4.79 points to close at 1022.58, below the 1025 level. The daily MAs and MACD continued lower.
Nasdaq
Nasdaq fell 9.57 points to close at 2091.79, below 2100. Its daily MAs and MACd also kept on slipping.
Both SPX and Nasdaq fell below their respective key support levels (SPX 1040; Nasdaq 2150). However, after rising above 37, VIX has come down to 30 again. For the new week, the market should be looking for a bounce after the quick fall for the past 2 weeks. The above mentioned levels should be the first resistances. We could see some volatile trading to start the week. If the market cannot break SPX 1040, we should see more selling before the end of the week. Energy sectors have been really weak and should see some upsdies if the market bounces.
Sector Watch
GLD (gold)
GLD took a big tumble on Thursday falling below the $118 level. It did manage to close the week above that level. At the same time, the Euro jumped. We'll be watching Euro and GLD in the new week. If GLD holds above $118, it should be range-bound for the week. $123 is still the resistance to break. If the Euro weakens, we should see gold rise.
USO (oil)
USO fell hard last week, closing below the $34 level and catching up with its daily lower BB. The MACD is showing a new bearish crossover. The latest global economic concerns have pressured oil again. If the market bounces, we could see some buying on USO. But, overall, USO is becoming weaker and weaker.
OIH (oil services)
OIH actually held up better than most sectors last week. Its daily MAs are pinching together. OIH will have to rise above $100 to accumulate any upwards momentum. DO, RIG, SLB, and BP should lead this sector. APC could see some weakness as BP has billed APC $272 million to share the cost of the clean up in the Gulf of Mexico.
XLF (financials)
XLF has falling fast with the market, riding lower on its daily lower BB. Its daily MAs are also showing a new bearish formation. GS could break below $130 this week. MA and V held up last week, but, could see some renewed weakness in the new week.
New funds are being approve to provide incentives in alternative energy. FSLR, TSL, YGE should be strong if the market bounces.
Good night and HappyTrading! ™ 
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