Another volatile week, but, it was a lot of fun! The nice thing was that the market ended the week on a high note. The important thing was that the market gained a little this week. The “happy” thing was that we made money!! 
Last weekend, in my Market Forecast, I said,
“For the new week, I’m looking for the volatility to continue, especially because it’s going to be an options expiration week. We have some important economic data coming (click on “Next Week†if you’re looking at the calendar this weekend), including PPI and CPI. The market is a little oversold for the near-term, so, we could see some bounces, especially in the techs. But, I’d need to see SPX above 1500 to be more comfortable. Needless to say, I’ll still be holding on to lots of cash.”
The market was indeed volatile. PPI and CPI were interpreted to be benign, and, the market made some nice bounces. On Monday, the market just could not find any strong footing and came down to test the support levels (Nasdaq 2625, SPX 1440). On Tuesday, the market bounced back and we made some nice gains on Chinese ADRs, big tech names, and GS. On Wednesday, the market opened strong, and we locked in our gains early, including a +93% profit on CHL, as the market slid later in the day. On Thursday, the market was weak again, but, the solar sector was getting buying interest. We played and made gains on both sides (calls and puts), including SPY puts and FSLR calls. On Friday, the market was very volatile, but, managed to close higher with the Dow gaining +66.74 points, SPX adding +7.59 points, and Nasdaq advancing +18.73 points. FSLR jumped more than $21 and gave us a nice +80% profit in just one day! Very awesome blessings! 
Let’s take a look at how the market closed:
HGX (housing) slid back below 150. XLF (financials) closed down a bit. SOX (semiconductors) was weak. INX2 (Internet), BTK (biotechs), and SWH (software) made some nice gains. GLD (gold) was nearly flat, but, most of the commodities and related sectors did better: GDX (gold minders) +1.10%, XME (metals and mining) +1.23%, USO (oil) +2.21%, and OIH (oil services) +2.41%, UNG (natural gas) +3.59! PBW (clean energy) had a solid day, adding +2.38%. FXI (Chinese ADRs) lost $3.04. (we’ll look at some of these sectors a little closer in Sector Watch tomorrow.)
SPX
SPX closed at 1458.74, up +7.59 points. It is certainly nice to see that it closed above 1440 by almost 20 points! The MACD is flattening a bit, but, the daily MAs are still sliding. We’ll need to see SPX rise above the 10-day MA, and maybe test the 20-day MA, to start getting the MAs to turn up.
Nasdaq
Similar story here. Nasdaq closed at 2637.24, up +18.73 points, and above its support level (2625). But, the MACD and daily MAs are still struggling.
For the new week, I think the market is in a position to make some more gains early in the week. As mentioned earlier, it’ll be good to see the market at least start testing the 10- and 20-day MAs. But, because the daily MAs are still deeply in their bearish formation, volatility can be expected. The market will likely still need some more time to sort things out. For me, it is still prudent to hold a solid cash position.
Hope you’re enjoying your weekend. I’ll be back tomorrow with my Sector Watch. The Holiday Season is here! Next week, the market is closed on Thursday for Thanksgiving, and trading only 1/2 day on Friday.
Have fun!
HappyTrading! ™
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