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Market Forecast + Sector Watch: SPX, Nasdaq, USO, XME, IGV, XLF     

Last weekend, in my Market Forecast, we discussed,

"For the new week, it seems this market just does not want to go down.  Techs still appear strong.  Nasdaq has resistance between 3090 and 3100.  SPX seems to have resistance at 1410.  We may see the market testing the resistance levels.  Whether or not it will break them, we'll have to see how things go during the week."

Well, on Monday, both SPX and Nasdaq popped higher to test their resistance levels.  But, by Tuesday afternoon, things started to come back down.  We locked in some profits on the longside before the market pulled back.  On Wednesday and Thursday, things fell lower.  However, by Friday's close both SPX and Nasdaq came back up to close just below the forecasted resistance levels.

You might be reading 5 to 10 articles (not to mention watching hours of CNBC) each week trying to piece together a picture for the market's direction.  Every weekend, before the week even starts, I sum up what the market could do in one simple paragraph, about 5 to 6 sentences.  Wouldn't you think with that kind of advantage, it'll help your trading/investing?  To get my full Market Forecast every week, just follow the link below to subscribe to HappyTrading Premium Articles and Email Alerts:

(to subscribe to our Premium Services, please visit our Services Page or CLICK HERE to watch a step-by-step instructional video)

March quickly went by, and the market closed up its best first quarter in over 10 years.  We also had a great month, especially with our Ecstatic Plays, with multiple triple-digit gainers.  Click here to see our trade results.

For the week, the Dow was up +131.31 points; SPX added +11.36 points; Nasdaq gained +23.65 points.  Oil finally went down for a week and gold was slightly up.  At the time of this writing, Asian markets were mixed, with China bouncing a bit and Japan pushing higher.  Here's how the US market closed on Friday,

SPX

SPX added +5.19 points to close at 1408.47.  It managed to close above its daily MAs.  But, the MACD slid.

Nasdaq

Nasdaq slipped 3.79 points to close at 3091.57.  It also closed above its daily MAs.  Its MACD was slightly lower.

Both SPX and Nasdaq struggled with their respective resistance levels.  However, they did manage to make new highs for 2012!  For the new week, the market may get an early test on the resistance levels again (SPX 1410 and Nasdaq 3100).  Then, the market may struggle a bit to keep above those levels.  On the down side, SPX has support between 1390 and 1400; for Nasdaq, support is 3075.  If techs and financials remain strong, we may see the market get a new leg up by the end of the week.  Energy stocks seem to remain weak.

Sector Watch

USO (oil)

USO fell last week and its daily MAs have moved into a bearish formation.  This is good news for the economy and for stocks!  Both OIH (oil services) and XLE (energy) remain weak.

XME (metals and mining)

XME was basically unchanged last week.  It seems to be finding support at $48.5.  However, its daily MAs are almost pushing into a new bearish formation.  At best, this sector is range-bound for now.  BTU and PCX are almost breaking down.  CLF and WLT are trying to hang on to support.  X and STLD are neutral, with X slightly on the bullish side.  Gold miners remain weak.

IGV (software)

IGV is still strong, especially with RHT's strong earnings.  CRM, VMW, FFIV, CTSH, CTXS, and CHKP all still look healthy.

XLF (financials)

XLF barely hung on to its 10-day MA last week.  If the financials push higher, the market will likely follow.  WFC and JPM are a bit toppy.  GS has a lot of room to go higher.  BLK may get a breakout.  But, MA and V seem to be drawing tops.

The "wildcard" sector this week may be the biotechs.  BTK (biotech index) broke out last week.  We'll likely look at some familiar names such as CELG and GILD.  Hot stocks are ALXN and REGN.

Good night and HappyTrading! ™

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