Wang’s Happy Trading

Market Forecast + Sector Watch: SPX, Nasdaq, XLF, USO, INX2, SOXX, BTK

from MyHappyTrading.com by HappyTrading! ™

The market had a really tough week last week. The Dow lost 322.59 points; SPX fell 40.52 points; Nasdaq tumbled 111.64 points!! Last weekend, in my Market Forecast, I said,

“For the new week, although we only have 4 trading sessions, I think it could be a very crucial week. VIX could test 22 from here, which would not be good for the market. SPX’s daily MAs are getting pinched closer and closer together; this could signal big movements coming soon.”

VIX closed just above 23 on Friday, and, we saw a huge move to the downside on Thursday (SPX -38.15 points), as more bad economic news vexed the market. We also saw USO (oil) and UNG (natural gas) break down lower (mentioned in last week’s Sector Watch). However, even though oil prices went lower and the dollar continued to climb, the selling pressure was too great for most sectors to overcome.

Many of our members were able to find profittable trades on the downside. One such member was Bagger Vance, who has been playing more puts on the market since 2 weeks ago. “Mr. Bagger” cashed out on some pretty nice trades last week:
September 04, 2008

07:01 | Bagger Vance QQQQ ($3.50) Sold to Close QQQUV Sep 48 put, at $3.50 +100%

10:55 | Bagger Vance BIDU ($16.00) Sold to Close BDUUZ Sep 300 put, at $16.0 +49%

10:54 | Bagger Vance MA ($5.80) Sold to Close MALUD Sep 220 put, at $5.80 +93%

06:49 | Bagger Vance RIMM ($6.70) Sold to Close RULVD Oct 120 put, at $10.75 +60%

06:42 | Bagger Vance IBM ($5.80) Sold to Close IBMVD Oct 120 put, at $5.80 +93%

Great Trading, Bagger Vance! You can find out more about him at his public bio page.

Since Friday, after the market, there have been talks about the government taking over FNM and FRE. Today, Sunday, news came out to confirm those speculations. Both FNM and FRE shares dropped on Friday, after the market. But, the reation from the overall market, especially in the rest of the financial sector was positive. Let’s take a look at where the market stands:

SPX

SPX added +5.48 points to close at 1242.31. It closed above the 1240 level. Its daily MAs curved lower and the MACD fell.

Nasdaq

Nasdaq slid 3.18 points to close at 2255.88. It closed above the 2250 level. But, its 10- and 20-day MAs curved down and the MACD dropped.

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This entry was written by HappyTrading and posted on September 7, 2008 at 2:39 pm and filed under Nasdaq, SOXX, SPX, BTK, XLF, USO, INX2. Bookmark the permalink. Follow any comments here with the RSS feed for this post. Trackbacks are closed, but you can post a comment.