Wang’s Happy Trading

First week back from my vacation and the market made solid gains. The Dow was up +166.34 points; SPX gained +16.06 points; and Nasdaq added +54.06 points. I’ll just do a quick wrap with the trades made this week and go right into my Market Forecast.

We got 100% GR$$N on the closed trades:
RIMM ($131.12)
RULED, rest out at $12.5, +62.3% (all out)

IBM ($124.05)
IBMED, May 123 calls, at $4.6, +12.2% (partially out)

RIMM ($127.45)
RULED, May 120 calls, at $9.5, +23.3% (partially out)

UNP ($146.89)
UNPEI, May 145 calls, at $4.4, +54.4%

UNP ($146.23)
UNPEI, May 145 calls, at $4, +40.3%

RIMM ($126.9)
RULED, May 120 calls, at $9.3, +34.7%

RIMM ($126)
RULED, May 120 calls, at $8.5, +23.1%

The trades left open were:
IBM ($123.5)
IBMED, May 123 calls, at $4.1 (open, partially out)
Friday close: $3.6; unrealized gain/loss: -13.9%

FSLR ($275)
HJQEV, May 290 calls, at $17.8 (4/30), added 3x at $8.4 (open, avg cost now $10.75)
Friday close: $7.4; unrealized gain/loss: -45.2%

HES ($106.95)
IGGEU, May 105 calls, at $5.1 (open)
Friday close: $4.3; unrealized gain/loss: -18.6%

I think this makes the 4th consecutive week (with 2 vacation weeks in between, and minus one trade) that I have had 100%
GR$$N on the closed (published) trades!! I publish these trades as soon as they are made on the member site.

Market Forecast
After the “Big Green Day” on Thursday, the market took a little breather, but, still managed to close in the green, although Nasdaq slid slightly. Commodity sectors bounced again and helped SPX to gain +4.56 points. The Dow also added +47.8 points.

The broader market still showed more greens on Friday. VIX tried to go up, but, failed. It closed just above $18. Remember what I said about VIX and its support at $18 on Thursday? Commodity related sectors made another attempt to bounce and they bounced strongly, as can be seen in XME (metals and mining), USO (oil), OIH (oil and services), and UNG (natural gas). INX2 (Internet) kept things going up. FXI (Chinese ADRs) also continued to rise.

SPX

SPX added +4.56 points to close at 1423.90. It almost caught the daily upper BB intraday, but, closed just below. Its daily MAs and MACD continued higher. The nearest resistance is at about 1425.

Nasdaq

Nasdaq slid 3.72 points to close at 2476.99. Its daily MAs and MACD still looked strong. The nearest resistance is at about 2500.

For the new week, I will be watching the above mentioned resistance levels (SPX 1425; Nasdaq 2500). It’ll also be interesting to see how VIX handles the support at $18. The overall market still looks strong with room to go up on the daily charts. If the market breaks through the resistance levels and VIX goes below $18, the market could get another strong week. XLF (financials) has caught its daily upper BB with the big rally on Thursday. This could be a further bullish sign for the market. I will also be watching how commodities play against the techs. Some commodity related sectors are threatening to make a comeback already, although some money did seem to be rolling into techs last week. Will the leadership continue to shift towards tech? Let’s take a look at where some of these sectors stand.

Sector Watch
Commodity related sectors got a little weaker this past week, although they still seemed to have some life in them.

XME (metals and mining)

XME made a +3.29% bounce on Friday, with X almost making a new all-time high and RTP jumping more than $20!! XME closed just below its 10-day MA. If XME goes above the 10- and 20-day MAs next week, a new bullish could be forming.

OIH (oil services)

We see some similarities in OIH. RIG (reporting before the market on Wed. 5/7) added +4.23%, while DO gained +3.38% on Friday. OIH’s chart still shows its daily MAs in a bullish formation, although the 10-day MA has been sliding. If it rises above the 10-day MA, it could extend this bullish formation.

On the other hand, the techs were strong, but, can they keep going?
INX2 (Internet)

INX2 has been advancing continuously. 280 seems to be a resistance. Breaking above 280, there’s a lot of room to go higher. Its daily MAs and MACD are all healthy.

SOX (semiconductors)

SOX is showing a strong chart also. It is right at a resistance (400). Rising above this, it could easily go to 420. Above 420, the nearest resistance is 460.

This weekend, news came out that YHOO has rejected MSFT’s $33/share buyout offer. Lots of speculations are going on as to what comes next. Some even say that a deal could still happen. It’ll also be interesting to see how GOOG shares react to this development. GOOG pushed above $600 on Friday before some profit-taking (and perhaps some caution being taken due to the uncertainty between MSFT and YHOO) kicked in. This could potentially push GOOG back above $600. The nearest resistance, then, would be at around $625. Further, CSCO reports on Tuesday, 5/6, after the market, which could also be an added stimulus for the techs (and the overal market).

Hope you’ve had a nice, happy, weekend!
Good night and HappyTrading! ™