Wang’s Happy Trading

This week has gone by fast with Christmas being a holiday. Year 2007 is also quickly coming to an end. Hope you’ve all had a great weekend!

Last weekend, I said, “The market is looking much more healthier!! For the new week, the market is in a good position to go higher. There might be some volatility early in the week as some of the options expiration manuevers linger on. The market may need to vent a little. If the market manages to let off some steam without losing much altitude (staying above the daily MAs is the key), the market could set itself up to catch the daily upper BB. Having the 30-day MA completely turned up would also a bullish sign.”

The market indeed jumped higher early in the week, and proceeded to vent later in the week. The market was able to let off steam “without losing much altitude”. This is a healthy indication. For the week, the Dow slipped 84.78 points; SPX lost just 5.97 points; and Nasdaq gave up 17.53 points. Nasdaq stayed above the daily MAs and SPX closed just a hair under the 20-day MA. The 30-day MA for both indices turned up.

On Monday, it was a “half-day”, and I didn’t do any trades. The market was pretty solid and I just let my positions ride. Tuesday was Christmas and the market was closed. On Wednesday, we started cashing out some of our recently deployed positions, which were quite profittable. On Thursday, we cashed out many more positions early, as the market proceeded to let off more steam. On Friday, it was a pretty quiet day and the market was flat.

Let’s see how the market looked at Friday’s close:

The techs were on the weak side with INX2 (Internet), SOX (semiconductors), and BTK (biotechs) slightly in the red; SWH (software), however, was slightly in the green. Commodities and related sectors did well: GDX (gold miners) was up +2.75%; GLD (gold) gained +1.77 points; XME (metas and mining) added +0.32%. USO (oil) was down slightly, while OIH (oil services) went up. HGX (housing) and XLF (financials) were still on the weak side. FXI (Chinese ADRs), PBW (clean energy), and MOO (agriculture) were pretty much flat.

SPX

SPX closed up +2.12 points, at 1478.49. It jumped above the 20-day MA early and tested the 10-day MA, but, closed just a hair below its 20-day MA. We need to see a more committed move above the 20-day MA to feel more bullish.

Nasdaq

Nasdaq lost 2.33 points to close at 2674.46. It stayed above its daily MAs.

For the new week, if the market continues up, I’ll be looking to see if Nasdaq can break above 2725 and SPX above 1500. If these 2 major indices can move above the just mentioned resistances levels, I think they could have enough momentum to catch their daily upper BBs. On the support side, we’ll need to see the 20-day MAs hold. It is encouraging to see that the 30-day MAs have turned up.

Many of the sectors are shaping up well. Please stayed tuned for my Sector Watch.

Happy Sunday and HappyTrading! ™