Last weekend, in my Market Forecast, I discussed,
"For the new week, the market will be watching the Euro Summit with a
special eye on the Greek debt deal. In addition, more earnings will
pile in this week. To break higher, SPX will need to push above 1320.
The market has been pushing higher since the beginning of the year. It
took a rest last week, and, will likely need some good news from Europe
to break out further. Energy stocks have been weak. Financials also
took a break last week, likely waiting to hear from Europe on Greece."
Once again (somehow it feels like I'm saying that a lot lately!), things progressed as forecasted. On Monday, the market gapped lower on worries over Europe. On Tuesday, the market fought hard to fight back, and, we locked in our profits and a very profittable month of January. On Wednesday, good news came out of Europe and US payroll data provided more positive surprise. SPX closed above 1320. Thursday brought another pause, as the market awaits the latest unemployment report. But, we picked the right winners at the right time scoring +229% gain on GMCR and +109% profit on SINA. The market popped another leg up on Friday, as the unemployment rate fell again.
We just wrapped up an excellent month of Jauary, and, we started February with another solid week, filled with "happy" and "ecstatic" trades.
For the week, the Dow gained +201.77 points; SPX added +28.57 points; Nasdaq gained +89.11 points. Gold and oil were both down. At the time of this writing, Asian markets were mostly up. Here's how the US market closed on Friday:
SPX
SPX added +19.36 points to close at 1344.9. Its daily MAs and MACD went up.
Nasdaq
Nasdaq gained +45.98 points to close at 2905.66. Its daily MAs and MACD climbed higher.
Wow, that was a strong week to start off February. All 3 major indices broke out! This market is testing the 2011 highs. For the new week, the market should push higher to test SPX 1350, which is not really far away. Europe is still fighting to get a deal done prevent Greece from going into default. I think regardless of how things go for Greece, even if a deal is not made, a quick pullback for the global markets will be healthy at this point. If the market does get a quick pullback, dip-buyers will likely jump in a provide the markets with support. Next resistance for SPX is 1360. The recently broke 1320 will likely become a support. Energy and mining stocks turned around last week. Financials broke out, which is a very favorable event.
Sector Watch
SLV (silver)
Silver and gold right now is a safety play. Greece could very well go into default and possibly exit Euro. Greece may not surprise the equity markets that much, but, it could push silver and gold higher.
MOO (agriculture)
MOO broke out last week. CF is still the strongest. POT is lagging. MOS, AGU, and MON are following along. AGU is reporting on Wednesday morning.
XME (metals and mining)
XME also broke out last week. Coals have regained their strength. Even CLF held up after its earnings report. BTU, PCX, and ANR are ready to break out. RIO and BHP have been strong. Today, Glencore offered 8% premium to buy Xstrata. It'll be interesting to see how this sector respond on Monday.
XLE (energy)
XLE had a strong day on Friday. It reversed the whole week for the energy sector. APA, OXY, EOG seem ready to push higher. NOV was on fire on Friday.
Good night and HappyTrading! ™
Sign up for FREE membership!
