Last weekend, in my Market Forecast, I said, “For the new week, we still have lots and lots of earnings to go through. Itâ€™s likely to be volatile, especially early in the week, as the market sorts things out. Since the weekly charts are much stronger than the daily charts, weâ€™ll hold cash and see if the market bounces early in the week, and trade accordingly.” This week, the market was indeed volatile, and, we did get some nice bounces early in the week (Monday and Tuesday). But, in my Tuesday’s evening post, I said, “We might still see some volatility, though, as the past 3 trading days have been pretty erratic! Iâ€™m doing quick daytrades and holding on to lots of cash.” On Wednesday and Thursday, the volatility continued, and, the market gave back some gains. On Thursday night, the tone of the market shifted towards the bullish side again, as many companies reported strong earnings, including MSFT, WFR, DECK, and BIDU. Then, on Friday, the market rallied and recorded a winning week!
Here’s how the market closed on Friday:
HGX (housing) had a good day, rising +2.5%, following CFC‘s good future forecast. CFC flew up more than +32% on Friday!! SOX (semiconductors) was still on the weak side, but, was able to close pretty much flat. INX2 (Internet) was strong, gaining +2.25%. XME (metals and mining), GDX (gold miners), and GLD (gold) made some pretty solid gains adding +4.17%, +2%, and +2.18%, respectively. XLF (financials) added +2.43%, as GS jumped more than $9!! SWH (software) charged up +2.82% following MSFT‘s great earning report!
Nasdaq closed at 2804.19, above 2800, adding +53.33 points. On Thursday night, I said, “The overall picture is still pretty good, though. The 10-day and 20-day MAs are pinching closer together. One solid move up will push Nasdaq above its MAs again.” With Friday’s solid jump, the 10-day MA stayed above the 20-day MA, and, started to turn up. It allowed Nasdaq to close above the daily MAs. MACD is has started to turn up!
For the new week, I’m looking for the market to make some continuation of Friday’s rally, although we might still see volatility, especially early on Monday. We have another Fed meeting on Wednesday, so the gains early in the week may be a bit muted. Then, we’ll have to see what happens after the Fed meeting and play accordingly.
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Good night and HappyTrading ™