Wang’s Happy Trading

The market was weak all day until 2 hours before the close. It really looked like the market was going to break down further. But, rumors about Ambac Financial Group, Inc. (ABK) being close to announcing a rescue plan may have helped the market to stage a late, sharp, reversal. Some attribute the cause to bullish comments from Cisco (CSCO)’s CEO John Chamber.

The Dow ended down 45.1 points; SPX slid 4.59 points; Nasdaq added +1.68 points.

Here’s how the market looked at the close:

The techs were stronger today. INX2 (Internet), SOX (Semiconductors), and BTK (biotechs) all closed in the green. Commodities and related sectors saw sharp drops: USO (oil) -2.36%, OIH (oil services) -1.25%, GLD (gold) -2.12%, SLV (silver) -2.69%, XME (metals and mining) -2.75%, XAU (silver/gold index) -3.63%, DBA (agricultural commodities) -2.61%! We did, however, cashed out some of our AEM position at over +130% gain in the morning. AEM made a new all-time high at $74.37 today.

SPX

SPX slid 4.59 points to close at 1326.75. It went below its daily lower BB today and bounced back to close just above the 1325 support. The daily MAs are not looking too healthy though. The 10-day and 20-day MAs have turned lower, with the 20-day MA below the 30-day MA. The MACD difference (blue bars) just went negative.

Nasdaq

Nasdaq gained +1.68 points to close at 2260.28. It also went below its daily lower BB and bounced back to close above its 2250 support. Its daily MAs continued to slide. Its MACD flattened.

This weekend, in my Market Forecast, I said,
“For the new week, unless there are some “super” positive news (such as the bond insurers coming through with great solution plans), the market looks to be in a tough spot. With Nasdaq closing below 2300, the next immediate support is at 2250, which is only 20 points away. SPX closed only 5 points above the 1325 support level, so, it is not in that much of a better shape. Unless there are positive stimuli early in the week, these levels might find difficulties to sustain this time. For SPX, below 1325, the immediate support is 1300.”

So far, both SPX and Nasdaq are hanging on, staying above their respective support levels. But, I still think they’ll need the positive news to really prevent from breaking down further. If ABK does come through with some solution plans that make sense, it might just provide the support that the market needs.

This morning, news about a Google top executive leaving for Facebook spooked GOOG investors once again. GOOG shares fell as low as $435.78, but, bounced back to close at $444.60. ICE saw some buyers coming back in as its trading volume jumped +30% in February. ICE shares went up +1.84% today. AMZN saw its shares jump almost $3 as its CFO confirms its 2008 guidance. After the market, PDLI announced that it will end its effort to pursue a company sale; in addition, it plans to cut jobs. Its shares traded more than 15% lower in AH trading.