Wang’s Happy Trading

It was kind of a sluggish day on the market today, although the commodity related sectors were very strong! This weekend, in my Market Forecast, I said, “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.” (If you haven’t read that article, perhaps you’ll find time to read it soon?) Today, the techs took some time to breathe, and the rest of the market was not too bad.

The Dow was down 88.66 points; SPX slid 6.41 points; Nasdaq lost 12.87 points.

Here’s how the market looked at the close:

Commodity related sectors were all pretty strong: GLD (gold) +2%; SLV (silver) +1.95%; UNG (natural gas) +4.3%; USO (oil) +3.58% (new all-time high set: $96.92); XME (metals and mining) +3.62%, and OIH (oil services) +1.13%. Techs were on the weak side: INX2 (Internet) -1.55%, SOX (semiconductors) -0.75%, SWH (software) -0.54%. BTK (biotechs) closed up +0.25%. XLF (financials) lost 1.73%, while HGX (housing) added +0.41%.

SPX

SPX slid 6.41 points to close at 1407.49. Its daily MAs still looked healthy. The MACD flattened a bit.

Nasdaq

Nasdaq lost 12.87 points to close at 2464.12. Its daily MAs continued to go up, while the MACD flattened.

Today’s market actions described exactly what I was writing about this weekend. The techs ran a little too fast and the commodities were not quite done with thier rampage! But, overall, the market held together well. An interesting thing to note is that SPX also closed in the red, even with the solid gains in the commodities. I remember in the recent months, whenever the commodity related sectors were strong, SPX seemed to have always managed to close in the green. Financials were also weak today; maybe they contributed addition weight on the broader market.

So, what now? Well, the market seemed to have successfully vented after Thursday’s big jump. Tomorrow’s market actions will be very important. If the market finds overall strength, it still has room to extend this rally. VIX bounced off $18 today (as I’ve noted the support for the past few days), but, could not close above $19. If it falls below $18 again, I think $16 could be coming. So, we’ll be watching VIX closely for some indications.

As mentioned earlier, XME jumped +3.62% today. X made an new all-time high today at $166.85, up almost $10!! RTP added nearly another $20! Both of these were mentioned in my Sector Watch this weekend. The coal plays came alive today, as CNX, ACI, and BTU all made solid gains. PBR and RIO (remember those Brazilian stocks?) seemed to be looking for a breakout. These could be interesting to watch. I also find FCX and PCU intriguing. Steel plays have just been making new highs after new highs. These two copper plays are starting to build some momentum. PCU traded above $140 last year and is trading under $120 right now. FCX made a new all-time above $120 almost 2 weeks ago, and traded at $117 in AH today. I initiated a new position in FCX.

Good night and HappyTrading! ™