Wang's Happy Trading

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The market jumped out of the gate this morning, cheering the spending plan on infrastructure from President-elect Obama and the propsed rescue loans for the automakers.  Metals and mining led the market, as they have been driven so low in the past few months: X +24.44%; CLF +20.71%; BTU +19.36%; MEE +21.11%; ACI +19.78%.  Energy-related sectors also bounced, as oil prices recovered a bit. 

However, after the market, we saw target cuts from chip makers, including TXN, NSM, and ALTR.  TXN shares traded down 3.78% in AH trading.  FDX also slashed its 2009 outlook.  FDX fell more than 11% after the news.

The Dow ended +298.76 points; SPX added +33.63 points; Nasdaq gained +62.43%:

Commodity-related sectors were strong: XME (metals and mining) +14.96%; USO (oil) +5.46%; OIH (oil services) +7.65%; GDX (gold miners) +8.74%; XLE (energy) +4.44%.  UNG (natural gas), however, went down 3% (see this weekend’s Market Forecast).  XLF (financials) also went higher, adding +6.71%.  FXI (Chinese ADRs) jumped +8.88%.

SPX

SPX added +33.63 points to close at 909.70.  It closed above 900 and above its daily MAs.  MACD went higher.

Nasdaq

Nasdaq gained +62.43 points to close at 1571.74.  It also closed above its daily MAs, but, below the 1600 level.  Its MACD went up.

So, we’ve been looking at this 30-day MA for the past week.  Today, both SPX and Nasdaq closed above their respective 30-day MAs.  Their 10-day MAs also went above the 20-day MAs.  But, VIX only went down 1.44 points, closing just below 60, although it is good to see it under 60.  With more bad news from the semiconductor sector and Fedex (FDX), which some people see as a bellwether for the economy, can this rally continue?  We saw commodity-related sectors rally today in response to President-elect Obama’s infrastructure spending plans.  If these sectors draw a bottom here, they will definitely help to provide more momentum for the market’s recovery.  However, UNG (natural gas) does look like it’s still on its way down.  SOXX (semiconductors) also still shows weakness, especially with the target slashes after the market today.  Let’s see how the market handles the additional bad news tomorrow.

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