This morning, the market opened up sharply, almost completely erasing yesterday’s loss, as the Fed announced further plans to deal with credit problems. But, the big gains quickly faded.
Yesterday, I said, “The market now could slide further to test the 20-day MA (the cyan line). On the other hand, this quick drop might give some of the high-flyers more breathing room…It is good to be holding lots of cash right now. The drop was sharp today and it may take a few days for the market to sort things out. Things may also be more volatile in the next few days. Weâ€™ll be watching the 20-day MA closely to see it can hold.”
Well, the market was certainly volatile. As mentioned above, the market was up substantially in the morning, with the Dow being up almost +300 points, and went all the way into the red with one hour left in trading. However, it managed to close with a modest gain within the last 15 minutes! The Dow closed up +41.13 points; SPX added +8.94 points; and Nasdaq gained +18.79 points.
Here’s how the market looked at the close:
INX2 (Internet) was flat. SOX (semiconductors), BTK (biotechs), and SWH (software) managed with small gains. USO (oil), UNG (natural gas), and OIH (oil services) were strong, adding +5.18%, +4.01%, and +2.8%, respectively. GLD (gold), GDX (gold miners), and XME (metals and mining) also performed well, gaining +2.09%, +1.68%, and +1.59% respectively. PBW (clean energy) was up +1.76%. FXI (Chinese ADRs) advanced +2.78%.
SPX added +8.94 points to close at 1486.59. It came close to testing the 20-day MA and bounced back to close just above the 10-day MA. The MACD has flattened out a bit. We’ll need to see SPX back above 1500 to feel more bullish, but, staying above the 10-day MA is a positive sign.
Nasdaq gained +18.79 points to close at 2671.14. It touched the 20-day MA today and jumped back up to close right at where the 10-day and the 30-day MAs meet. The 10-day MA is looking to cross above the 30-day MA. Its MACD is also flattening a bit.
After the market today, BIIB announced that its search for a possible buyer has failed to yield any definitive offers. Its shares plunged more than 20 points, or 26.85%!! Oil prices jumped today, as crude supplies unexpectedly declined. As mentioned before, USO, UNG, and OIH all made substantial gains today. DO made a new all-time high today at $130.6, but, closed at $129.85, up +3.26%. RIG also gained +2.01%, nearing its all-time high of $139.99 (post GSF purchase/split value). SLB added +2.25%.
Good night and HappyTrading! ™