Wang’s Happy Trading

Last week, the market broke through the support that it has been holding for 7-8 weeks. The Dow closed below 12,000, at 11893.69, down 372.7 points for the week. SPX closed below 1300, at 1293.37, down 37.26 points. Nasdaq fell 58.99 points, closing at 2212.49.

SPX

SPX lost 10.97 points to close at 1293.37, below the 1300 support. Its daily MAs are just rolling into a new “bearish” formation, not a good sign. The MACD slid lower.

Nasdaq

Nasdaq fell 8.01 points to close at 2212.49, sliding lower along it daily lower BB. It went below its January low on Friday (2200), but bounced back to close above. Its daily MAs extended their bearish formation. The MACD was slightly lower.

The market is testing its January low, which for the new week, could be very interesting. The market has now fallen more than 15% from last year’s October high; Nasdaq has done worse, dropping more than 20%! If the Jan. lows do not hold, SPX’s next support is between 1225-1250; for Nasdaq, the support is between 2100-2200. Even if the market successfully tests the Jan. lows and bounces back, it’ll still have to fight through the daily MAs, which are now sloping down. So, it is prudent to be very cautious.

Sector Watch
I’m going to continue to focus on silver, gold, and foreign currencies this week.

GLD (gold)

GLD made a new all-time high at $98.15 last week. It saw some profit-taking on Thursday and Friday. But, it looks like it has pleanty of room to go up. It is also still showing strength, staying above the 10-day MA on profit-taking, quick drops.

SLV (silver)

SLV is also staying above its 10-day MA. Its MACD is flattening out. Again, it is looking a bit toppy, but, it does have a lot of momentum. Pumping above $205 could bring a new leg up!

GDX (gold miners)

GDX seems to be having some problems breaking $55. Its weekly chart (not show here), though, looks like it is just starting a new leg up. We’ll continue to watch AEM and ABX with interest.

XAU (gold and silver index)

XAU has been held hostage below 203. Breaking 203 could bright a new leg up.

Last week, we talked about FXY, tracking Yen, which did quite well and looking to go higher. This week, we’ll add 2 other foreign currencies: FXB and FXE.

FXB (British Pound)

FXB caught its daily upper BB last week and has begun to ride it higher. $202 seems to be a barrier, but, will likely get broken through.

FXE (Euro)

FXE has been very strong for the past 2-3 weeks. It is looking still very good. It broke above $152 last week and started a new leg up.

Hope you’ve had a great weekend!
Good night and HappyTrading! ™