Last weekend, in my Market Forecast, I said:
"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."
Monday was a holiday. On Tuesday, the market gapped up to test SPX 1040, but failed; it sank back down in the afternoon. However, it tried again on Wednesday. Around noon, the market broke through SPX 1040 and excelerated higher until the close. On Thursday, the market displayed some hesitance in the morning and pushed higher in the afternoon. On Friday, the market continued higher and finished a very strong week.
This market has been turning directions fast in the recent weeks, and the environment has been volatile. We didn't trade much this week and had some mixed results trading on both sides. Here are the closed trades:
July 09, 2010
12:26 | HappyTrading RIMM ($53.65) Sold to Close 07C50 Jul 50 calls, at $3.85 +57%
11:44 | HappyTrading RIMM ($53.35) Sold to Close 07C50 Jul 50 calls, at $3.60 +47%
09:01 | HappyTrading RIMM ($52.90) Sold to Close 07C50 Jul 50 calls, at $3.25 +33%
06:42 | HappyTrading GS ($135.80) Sold to Close 07P135 Jul 135 put, at $2.00 -38%
July 08, 2010
06:37 | HappyTrading BIDU ($73.60) Sold to Close 07C70 Jul 70 calls, at $4.60 +33%
July 07, 2010
11:23 | HappyTrading MA ($205.40) Sold to Close 07P200 Jul 200 put, at $2.50 -43%
10:49 | HappyTrading AAPL ($255.40) Sold to Close 07P240 Jul 240 put, at $1.40 -68%
For the week, the Dow was up +511.55 points; SPX added +55.38 points: Nasdaq jumped +104.66 points. Oil was up over $75/barrel. Gold was weak, but, did come back up to close above $1200/ounce. At the time of this writing, Asian market were mostly higher. Let's take a look at how the US market looks after Friday's close:
SPX
SPX added +7.71 points to close at 1077.96. It closed just above its daily MAs, but, below the 1080 level. Its MACD continued higher.
Nasdaq
Nasdaq gained +21.05 points to close at 2196.45, just below the 2200 level. Its MACD also moved up.
The market bounced fast this week. SPX closed just above its daily MAs, but, still below the 1080 level. Nasdaq closed below the 2200 level. VIX slid back down to just below 25. For the new week, it will be about the earnings. If the earnings are strong and confirm the strength in the economic recovery, the market can continue to rally. Otherwise, the market could turn down to test the recent lows again. On Monday, we'll hear from AA and CSX after the market. On Tuesday, INTC and YUM will report. Thursday brings JPM in the morning and GOOG in the afternoon. On Friday, C, BAC, and GE wil present their quarterly reports. So, we have a busy week to start off the earnings season with some important bellwether companies reporting. On the upside, if SPX goes above 1100, it should set a positive tone for the market in this earnings season. The upper resistance of the recent range is SPX 1300. On the downside, the lower support is SPX 1020.
Sector Watch
GLD (gold)
GLD bounced up on Friday to close above $118. it was about to turn bearish. NEM charged higher to test $63 again, but, did not break out. GLD has been just as volatile as the equities market, going from breaking out to breaking down in a couple of weeks. But, it did neither; and, is back above the key support level. GLD can turn bullish above $120, but, will still have to break that $122 to $123 level to go get out of its trading range.
MOO (agriculture)
MOO had a very strong week. It closed above its daily MAs, which haved turned up. Its MACD is showing a new bullish turnover. POT, CF, and MOS have all been very strong.
XLE (energy)
XLE is moving pretty much in sync with SPX (or, vice versa?). XLE's daily MAs have flattened and the MACD has turned up. Oil services have been really strong. BP, APC, RIG, and HAL (the onces involved in the Gulf oil spill) bounced strongly last week. Tonight, rumors are circulating about BP considering selling assets to APA. APA has come down quite a bit, so, will be interesting to watch.
PBW (clean energy)
The oil spill has brought buying interest back to the solar stocks. PBW closed above its daily MAs, which have turned higher. Its MACD has turned up as well. FSLR, STP, TSL, YGE have all been rallying strongly.
Good night and HappyTrading! ™ 
(click to see our Facebook Page)
