Wang’s Happy Trading

Last weekend, I said, “For the new week, we’ll have to be very cautious. Let’s see how the beginning of the week goes. Monday and Tuesday could be very vital.” Monday was a quiet day, with the OIH’s breaking out to new heights! Tuesday, I did an intraday post, warning people to “be careful” as SPX broke the 1525 support level. From then on, we were in cash and making good money with quick trades, mostly on the “puts”, as the market slid more and became highly volatile, with the VIX closing above 24!

Let’s see how the market looks after this wild week:
Nasdaq

Nasdaq is still pretty healthy as it closed above its 20-wk MA, and stayed within the our range of support (2550-2575). You can see that for about 8-10 weeks (4/23-6/25), Nasdaq established this support range. So, it should be pretty strong and we’ll watch it carefully.

SPX

SPX closed below its weekly MAs, which is not something that we want to have! But, it did stay at the upper level (1460) of the support range (1440-1460) that we’ve been talking about!

So, for the new week, we’ll watch these support ranges and the sectors that we talked about yesterday. Pay extra attention to XLF. I really think that if XLF starts to bounce, so will the broader market. In the beginning of the week, we can probably expect some more volatility as the “ultra” bears and bulls fight it out. And, as the market is nervous, any news can help push the momentum in either direction!

If the market bounces next week, this might just turn out to be another healthy correction
(as of Friday: SPX -6.2%, Nasdaq -6.0%, Dow -5.4%) for the market to continue higher!!

Enjoy the rest of your weekend!
HappyTrading! ™