Wang’s Happy Trading

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Last weekend, in my Market Forecast, I said,
For the new week, what we should be looking for is a bullish crossover on the MACDs.  The MACDs (the red lines) are now very close to MACD signals (the green lines).  If the red lines cross over above the green lines, we’ll have a bullish crossover, which could be a “buy” signal for the market.  If this happens, I think we’ll also see the market indices go above their respective 10-day MAs.  Incredibly, VIX eked out a gain this week and closed above 70.  We’ll have to see if VIX would come down and close below 60 this week.”

On Monday, the market jumped higher and the major indices closed above their respective 10-day MAs.  VIX went below 60.  But, the market turned weaker on Tuesday, although Nasdaq was showing a bullish crossover in its MACD.  By the time Wednesday came around, the market resumed its selling mode, and VIX went back above 60.  On Thursday, the selling took a short respite; then, it continued on Friday to close the week in the red, yet again!  VIX closed at 79.13 and went above 80 on Friday.  The financials and techs were very weak.  Some beaten-down sectors in the commodities showed some attempts to bounce.  But, no rallies were able to hold.

The Dow ended the week down 473.27 points; SPX lost 63.23 points; Nasdaq fell 159.26 points.  A big chunk of the losses happened on Friday:
SPX

On Friday, SPX fell 31.34 points to close at 876.77, below the 900 level.  The MACD went lower.

Nasdaq

Nasdaq tumbled 51.88 points to close at 1552.03.  It went below 1500 intraday, and bounced back.  The MACD turned lower.

After last week, the market technicals got even weaker.  Both SPX and Nasdaq are on a new leg down, breaking the support at SPX 900 and Nasdaq 1650.  For the new week, among many important economic data, on Wednesday, we’ll find out whether the Fed will lower the interest rates even more; and, on Friday, we’ll get the GDP report.  VIX is nearly 80 and still seems to have a lot of…

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