Wang’s Happy Trading

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Last weenkend, I said,

“The biggest news on Sunday evening have been on LEH, MER, and AIG.  At the time of this writing, there has not yet been a deal reached for LEH.  There are new rumors about BAC possibly in talks to buy MER.  Other the other hand,  AIG is planning major reconstructuring, including selling of assects to raise cash.  The market seems to be ready to open lower on Monday if no solid solutions are reached to help LEH before the market open.  For the new week, we’ll need to see how the market acts early in the week.  If the market cannot hold the July lows (SPX 1200; Nasdaq 2200), it could start a new leg lower.  Both SPX and Nasdaq are showing new bearish formations in their daily MAs.  VIX is above 25 and could shoot up to 30.”

The market fought hard to keep the support levels (SPX 1200 and Nasdaq 2200) early in the week.  But, by mid-week, both SPX and Nasdaq fell below their respective support levels, and started on a new leg down.  On Thursday, just when the market sank lower and lower, the news about the government creating a “RTP-type” agency to help solve the credit problems encouraged the market to turn its downward spiral into a sharp rally!  On Friday, the market continued higher as SEC banned short-selling on financial stocks until Oct 2.

After a wild roller coaster ride, the market closed the week basically unchanged with the Dow having a range of over 1,000 points!  For the week, the Dow ended down 33.55 points; SPX added +3.38 points; Nasdaq gained +12.63 points:

SPX

On Friday, SPX added +48.57 points to close at 1255.08.  Its 10-day MA flattened and the MACD went higher.

Nasdaq

Nasdaq jumped +74.8 points to close at 2273.90.  It closed above its 10-day MA, which turned up.  Its MACD also went higher.

Some financial headlines at the time of this writing include: Sydney banning short-selling across the whole market; GS and MA received approval to become bank holding firms!  Asian markets were mostly higher.  Governments all over the globe are working together to solve the credit crisis.  In the US, we are still waiting to hear the finalized rescue plan from the Treasury and the Congress….

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