Wang's Happy Trading

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Last weekend, in my Market Forecast, I said,
“For the new week, we’ll need to see this market continue to rally.  Any big drops will likely bring back fear and discourage the investors.  After a 2-day, sharp rise, we’ll have to see how the market does on Monday.  We could see a mixed open, as there may be some profit-taking; unless, our lawmakers can give us some good news before the market opens in the morning.  But, we’ll need to see strength to hold the altitude and push this market higher.”

On Monday, the market did open mixed, but, the overall market was weak.  It did not show much strength at all and resulted in a big drop.  The market saw more fear from discouraged investors.  Throughout the week, much focus was on the Congress and whether they can approve a rescue plan that will help solve the credit crisis.  Various news pushed the market up, down, and sideways, as the market surfed the fast-changing waves of emotions.  For the rest of the week, the market traded in a tight range, as investors awaited for actions from the Congress.

For the week, the Dow was down 245.31 points; SPX lost 42.07 points; Nasdaq fell 90.56 points.  Interestingly though, the major indices had some encouraging developments on Friday.  Let’s take a look:

SPX

On Friday, SPX added +3.83 to close at 1213.01.  It closed above the 1200 level and above its 10-day MA.  The MACD went higher.

Nasdaq

Nasdaq fell 3.23 points to close at 2183.34.  It closed right at its 10-day MA.  The MACD glided up.

SPX was able to close above the 1200 level and its 10-day MA.  Both SPX and Nasdaq are looking for a possible bullish crossover on the MACD, perhaps in anticipation of the “rescue plan” being passed in the coming week.  So far, the latest news on the “rescue plan” that I can find is that the plan has been finalized and…

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