Wang’s Happy Trading

Market Keeps Gains On Another Volatile Day: SPX, Nasdaq, GS, BAC, PRU, PNC, BLK, FNM, FRE, CME, ICE

from MyHappyTrading.com by HappyTrading! ™

The market started with a huge gap-up open and charged higher, as investors cheered the government bailout of FNM and FRE. But, quickly after the first 15-minutes of trading, things started to lose momentum. The commodities were still very weak. Coals, metals and fertilizers all went even lower today. Techs also gave up some gains after the morning jump. Financials kept things strong: GS +3.98% (we have a new published trade on this); BAC +7.76%; PRU +7.85%; PNC +3.35%; BLK +5.75%. CME jumped +7.04% and ICE added another +1.84% on top of Friday’s $7+ gain!

The market regrouped in the afternoon and was able to rally back up. The broader market close near its day high. The Dow was up +289.79 points; SPX gained +25.48 points; Nasdaq added 13.88 points:

HGX (housing) flew +7.23% while XLF (financials) jumped +4.32%. Commodity-related sectors were mostly weak: XME (metals and mining) -5.89%; GDX (gold miners) -5.24%; OIH (oil services) -2.39%; MOO (agriculture). INX2 (Internet) added +1.1%. FXI (Chinese ADRs) went up +1.2%.

SPX

SPX gained +25.48 points to close at 1267.79. It closed just below its daily MAs. The MACD went higher.

Nasdaq

Nasdaq added +13.88 points to close at 2269.76. Its daily MAs and MACD went lower.

In this weekend’s Market Forecast, I said, “I think in order for any rally to stick, VIX will have to get pushed back down below 21. 22 should now be a support.” VIX came down to test 22 this morning, and, jumped back up; at the same time, the market gave back a big part of its morning gains. Nasdaq went into the red, while commodity-related sectors slid lower on a new leg down. VIX tried couple of times to burst through 24, but, was unable to do so. Then, the market rallied strongly into the close. VIX will likely be negotiating with 22 again tomorrow. But, in order to sustain this rally, VIX needs to go below 21. We’ll also keep an eye on the financials; XLF closed above its daily upper BB, which could be a good sign. The housing sector has broke out on a new leg up. As mentioned earlier, commodity-related sectors have been very weak. Metals, coals, energy, and agriculture all closed below significant supports. What’s happening here, I think, is that the commodities bull market is ending, and, money continues to roll out of those sectors. Meanwhile, no real new leadership has emerged yet. But, I think if this market intends to establish the bottom here, we’ll need to some some leadership in the techs.

Good night and HappyTrading! ™

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This entry was written by HappyTrading and posted on September 8, 2008 at 4:38 pm and filed under GS, ICE, CME, FRE, PRU, BAC, FNM, PNC, BLK. Bookmark the permalink. Follow any comments here with the RSS feed for this post. Trackbacks are closed, but you can post a comment.