Wang’s Happy Trading

The market bounced today after opening lower. Two weeks ago, on 1/22/08, I said,

HappyTrading
Posted January 22, 2008 at 12:21 pm | Permalink (Edit)
market
I’m cautiously “more” optimistic. If this is indeed establishing the bottom, then, we haven’t seen the real bounce yet. The initial bounce will need to take SPX to 1375-1410 (the 2 resistance levels above 1320). Then, we’d probably need a test of some sort before calling the bounce “real”.

We saw the initial bounce last week to about 1395, between 1375-1410.

On 1/30/08, I said of SPX,

“If it penetrates below the 10-day MA, it is more likely to be on its way to test the lows, which would probably find support in the 1300-1320 region.”

SPX dropped below its 10-day MA on Monday, and it went as low as 1316.75 today; then, it bounced back.

This could be a very good double-bottom test, if the market can continue up from here. The U.S. Senate passed the economic stimulus plan today, announced after the market clsoe, that would give rebates of up to $600 for individuals or $1,200 for couples plus $300 for each child. This could provide some additional, positive momentum to the market tomorrow.

The Dow closed up +46.90 points; SPX added +10.46 points; and Nasdaq gained +14.28 points.

Here’s how the market closed:

INX2 (Internet), SOX (semiconductors), and BTK (biotechs) was able to make slight gaines. UNG (natural gas) jumped +2.41%. GLD (gold) went up, while GDX (gold miners) stayed flat. PBW (clean energy) added +1.49%. XME (metals and mining) was solid with a +1.94% advance. FXI (Chinese ADRs) recovered almost +4%.

SPX

SPX added +10.46 points to close at 1336.91. It tested the 1300-1320 region and closed above the 1325 support level. Certainly encouraging. But, to feel more comfortable, we’ll need to see SPX move up above the 1375 level, which would probably cause the 10-day MA to turn up and cross above the 20-day MA. Getting above the 1410 level could help the market to confirm this double-bottom.

Nasdaq

Nasdaq gained +14.28 points to close at 2293.03. It touched its daily lower BB, near 2250, and bounced back. It’ll need to get back above 2350 (between 2350-2450) to make me feel more comfortable. Getting above 2450 could solidify this double-bottom.

While today’s market performance was positive, it is not out of the woods yet. We’ll need to see continued upwards movements from here to at least turn the 10-day MA up and above the 20-day MA before taking a breather. So, the market is still at a precarious spot.

This morning, CME, and the exchanges sector, received positive analyst comments downplaying the cautious concerns from the Department of Justice. Yesterday, I said,

“If there’s any re-assurance that the fundamental way of doing business for these exchange companies will not change, this sector may get some buyers rushing in to pick up the much cheaper shares.”

Today, CME bounced back $42.76, or +8.81%, to close at $528.01. It traded as high as $547.43, up $62 from the previous close! ICE also jumped, up $14.49, or +12.5%. ACL reported strong earnings and gave a positive outlook for 2008. It finished +10% higher, up $14.08. This morning, on the member board, I announced:

HappyTrading
Posted February 7, 2008 at 7:03 am | Permalink (Edit)
ACL and WMS (unrelated)
big greens on my screen; good earnings.

ACL continued up from there and gained about $9 more to the close. It looks like ACL could go into the $160s from here before taking a rest. After the market, CF reported healthy profits and raised its dividend. Its shares traded almost +7% higher in AH. Popular names in this sector, such as MON, POT, and MOS, may all benefit tomorrow. MTD reported earnings that beat the estimates and issued upside guidance. Its shares were up +7% in AH.

Good night and HappyTrading! ™