This has been an interesting week. Besides Thursday’s sell-off, the rest of the week was pretty bullish. But, that one day was enough to give most of the markets a red week. The weekly charts this week, thus, can be deceiving. But, they do render good reasons to be cautious.
Nasdaq
Nasdaq made an attempt to catch up with its weekly upper BB, hitting just above 2600! But, Thursday’s sell-off (venting, profit-taking, what you will…) kept it in the red this week. The good thing is that the weekly MAs are still very much in the bullish formation, with 10- above 20- above the 30-wk MA. Let’s take a quick look at the daily chart:
After Thursday’s “sliding” actions, I was looking for a rebound. I was specifically watching for Nasdaq to close Friday above its daily MAs. And, it did! This still keeps the picture on the bullish side!
Next week, I’m still looking for the Internet sector to lead. The telecom sector seems to be getting some good buying attention, also. After VIP’s earnings report, names like MBT, MICC, and GLDN all jumped on Friday. I also think that if the markets were to continue this bull run, the semiconductors need to start bouncing back up. So, let’s keep an eye on the big names such as TXN, INTC, and AMAT. There are also rumors for LRCX to be aquired.
GLD
GLD touched its 30-wk MA and bounced back. But, its weekly MACD has just turned negative. 65 remains to be an important level to watch. It does seem, however, that GLD will need some more time to consolidate.
SPX
Similar to Nasdaq, SPX touched a multi-year high this week, at just above 1530, but, closed the week in the red. Again, although this weekly chart gives us reasons to be cautious, the overall tone for the markets is still bullish. This can be more readily seen from SPX’s daily chart:
On Friday, SPX bounced back and was able to close above its 10-day MA. Tuesday should provide us with more clues for the rest of the week. A strong opener would likely to further extend the bullish trend.
If the markets continue to run, I’d look for the techs to lead. IBM got a nice bullish call for 120+ from Barron’s this weekend! HPQ continues to do well. And, investors seem to be buying up AAPL before the arrival of iPhone.
Exchange companies (ICE, BOT, CME, NDAQ…etc) may continue to see volatility as merger news keep the investors hypnotized!
Should be an interesting week!
Enjoy the rest of your long weekend! HappyTrading! ™
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