Wang's Happy Trading

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Happy President’s Day!

Last weekend, in my Market Forecast, I wrote:

“ The market is waiting to see if the stimulus plan will be swiftly passed in new week.  The market looks optimistic about the lastest stimulus package that is being discussed, and, could be ready to go higher.  SPX 900 and Nasdaq 1700 are the next resistance levels.  New developments in the TARP may also provide more reasons for the market to go higher.  We’ll continue to watch the financials closely to get an indication on how the market will react to the stimulus plan when passed.”

Unfortunately, there was just too much politics going on and the endless debates sank whatever optimism that the market had in the previous week.  On Monday, the markets pushed a little higher.  But, on Tuesday, confusion grew as discussions on the stimulus plan dragged on, and the markets stumbled.  Financials were mostly lower.  Gold, on the other hand, finally broke higher!  The stimulus plan was not passes until Friday evening.  Now it awaits for President Obama to sign.

As the stock market was very volatile and undecided, we stayed mostly in cash and did not trade much.  Let’s see where the market stand now:
SPX

SPX lost 8.35 points to close at 826.84.  It closed just below its daily MAs.  The MACD was flat.

Nasdaq

Nasdaq slid 7.35 points to close at 1534.36.  It closed at its 30-day MA.  The MACD was flat.

SPX closed below its daily MAs and barely held above the support, which has been recently established at 825.  Nasdaq, on the other hand, fared a little better and stayed in neutral territory, as its daily MAs flattened.  When the US market took a holiday on Monday, most other markets were slightly lower.  For the new week, it still seems that the market is waiting to see how the stimulus package is going to play out…

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