This week went by quickly as we celebrated Thanksgiving in the U.S. Last weekend, I said, “For the new week, I think the market is in a position to make some more gains early in the week. As mentioned earlier, itâ€™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.”
The market was still very volatile and tried hard to establish a bottom. It didn’t show much consistent strength until Friday. So, we had to be flexible and adjust our plays as each day went by. On Monday, the market was extremely volatile and lost more grounds. We daytraded FSLR, SPY (puts), CME, and profitted from last weeks STP position. On Tuesday, I invited guest bloggers (optiondragon, luck-o-the-irish) to write some articles as I made time to enjoy the scenery at Lake Tahoe. The market made an effort to bounce, but, closed just slightly green. On Wednesday, the market slid more before the “Turkey Day”. On Thursday, hopefully, everyone took some time off to enjoy the company of their friends and family. On Friday, the market displayed a better mood, as it showed a little more consistency and made a bounce. The Dow closed up +181.84 points; SPX gained +23.93 points; and Nasdaq added +34.45 points!
Here’s how the market looked at the close:
Most sectors were strong. Commodities and related sectors made some solid gains: GDX (gold miners) +4.34%, GLD (gold) +2.38%, XME (metals and mining) +2.03%, USO (oil) +0.42%, UNG (natural gas) +2.05%, OIH (oil services) +3.02%! XLF (financials) bounced +2.38%. FXI (Chinese ADRs) jumped +5.37%.
SPX added +23.93 points to close at 1440.70, just above 1440! This could be a good sign, although its daily MAs are still deeply in their bearish formation. We’ll need to see SPX close above its 10-day MA first, before feeling more encouraged by the bounce. The MACD is flattening.
Nasdaq gained +34.45 points to close at 2596.60. We’ll need to see Nasdaq back above 2625, which will also be above its 10-day MA. Its MACD could be trying to establish a bottom, but, I’d like to see the daily MAs start to turn.
This coming new week could be very important in setting the tone for the rest of the year. It is the holiday season, so, this weekend’s retail numbers will be important and could affect the moods on the market. We’ll need to see if the market can continue where it left off on Friday. If the market fails to reach above the 10-day MA, we’ll need to be prepared to play more on the downside. But, if the market can continue higher and close above the 10-day MA, it could establish a bottom here.
I spent most of the day traveling. I’m back home now. While I was up in Northern California, I got to meet Trading Goddess, a fellow blogger who occassionally contributes on my blog, and vice versa. Guess what I found out? She loves crab much more than she loves hot dogs, although perhaps I should’ve taken her to a “hot dog” stand (that’s an inside joke between me, her, and my girlfriend)!! Hey, get your mind out of the gutter! LOL!!
Happy Saturday evening!