In my market forcast this weekend, I said, “…I’m looking for the markets to be strong early in the week, pushing for new highs! There might be some profit-taking mid-to-late week…” The markets were strong early in the week, as we saw the techs pushing Nasdaq to a new multi-year high and the oil-services pushing OIH to a new all-time high. And, we saw pockets of “high-flying” actions here and there; also CMI, BWLD, EXPE, MA, and my recent favorite, FSLR (just to add a few more)!
Overall, the markets were not as strong as I had hoped, as I remarked on Monday, “I think in order for the markets to achieve new highs, these 2 sectors [referring to metals and biotechs] need to participate in the rally.” BTK (biotechs) and XME (metals/mining) tried their best, but, wasn’t able to break free yet, which partially resulted in SPX having a hard time making new highs.
Now, it’s Wednesday, mid-week, and, we’re seeing some profit-taking. These sharp quick drops are still displaying the characteristics of a bull market. So, it is better not to panic and accumulate cash, or, even make some plays on the short side to make some quick cash. Let’s check out some charts:
SPX
SPX closed below its daily MAs, taking us back to a more neutral gear. We may see some volatility for a couple of days. So, be cautious going either way.
Nasdaq
Although it closed just below 2600, Nasdaq’s chart is still on the bullish side, with its daily MAs still sloping up!
BTK
BTK is still trying sort things out. 780 has been a strong support. If it holds this time, we might see BTK finally completes its recent consolidation.
XME
Similar story with XME. There’s a support at 61. Let’s see what it does with it.
The volatility index, VIX, jumped 14+% today! So, be careful out there!
Oh, yeah, might want to keep an eye on the ICE/CME/BOT/NMX M&A development!
Good night and HappyTrading! ™
![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_6.gif)
![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/silver/t24_ag_en_usoz_6.gif)
5 Comments
With Oil down, we couldn’t move anywhere. Steel may have a little longer down cycle, but I see Oil and Construction Equipment helping bring us up. I think the VIX will help us on a longer term move higher.
Gary,
Good points. I think maybe we should also look at techs. We can’t keep counting on pure commodities to support the market. OIH’s now don’t always follow oil. And, every time we vent, more funds are being shifted to techs. Nasdaq certainly has a lot more room to go.
It looks like SMH is headed up today. If it can close above $39, perhaps we have our new market leader? Maybe you should do daily coverage of SMH, it is optionable.
Gary,
Don’t you think since I cover SOX, it should be sufficient (even more enclusive)? =) Pretty good action in the techs, huh? This is what I mean by paying attention to the techs. See my forecast this weekend (part I). Now, if we can get the biotechs to turn up. Also, OIH went up again today, not following the crude.
Hey, your old favorite XME didn’t do too badly, either! =D
On XME, I would like to see it break $65 first, I’m out of that right now. On a fundamental basis, housing has some effect on this and it traded some on M&A. So, I think it got ahead of itself. In the long run, just like other commodities the emerging markets is driving it up.
On SOX vs. SMH, I like to see something I could trade
I’m concerned that some of the semi move is due to the Vista upgrade, and that may die out. But, we can’t deny the move.
I like OIH because I see a long trend here.
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