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Last weekend, in my Market Forecast, I wrote:
“For the new week, it still seems that the market is waiting to see how the stimulus package is going to play out. The market is still undecided and needs more clarity on how the new ”Obama” plans are going help our economy. SPX is danger of break down. But, recently, the market seems to turn at break points, keeping it range-bound, not breaking out and not breaking down. However, the financials are showing some new weakness and could push the market lower.”
The financials indeed were very weak and pushed the Dow to new lows! SPX broke down and closed at 770, below 800. Nasdaq slipped back to below 1500. It was a tough week for the market, but, we found ways to profit from the market’s weakness in the ultrashort ETFs. Gold briefly went above $1000/ounce and oil fell below $35/barrel before bouncing up (both were discussed in the Sector Watch from last weekend). For the week, the Dow lost 484.74 points; SPX fell 56.79 points; and, Nasdaq lost 93.13 points!
Let’s see where the market stands:
SPX
On Friday, SPX lost 8.89 points to close at 770.05. Its daily MAs and MACD continued to go lower.
Nasdaq
Nasdaq slid 1.59 points to close at 1441.23. The daily MAs and MACD curved down.
The market technicals are looking just ugly! The Dow had already penetrated below the Nov ’08 lows. SPX is basically there and Nasdaq is slightly above. Overnight, Asian markets are mostly higher, but, Nikkei (Japan) is down, at the moment. The was news that the U.S. government may be seeking up to 40% stake in Citigroup (C),…
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