Wang’s Happy Trading

Last weekend, in my Market Forecast, I wrote,

"For the new week, a strong move to open the week should push the market above SPX 1100.  If the market does close above SPX 1100, we should see a new bullish formation on SPX’s daily chart.  We should see new buyers rush into the market, if VIX goes below 23 (staying below 23 would invite the buyers to stay).  Energy sectors were relatively weak last week and we’ll need to see some renewed strength in them to keep the market above SPX 1100.  Although financials did make up some grounds, they’ll need to be much stronger to help push the market higher."

Once again, things happened pretty much as forecasted.  On Monday, the market did get a strong open and the market closed above SPX 1100.  We locked in on some good profits.  Both the energy and financial sectors participated in the rally.  VIX closed below 23.  On Tuesday, the broader market traded flat, but, coal and agriculture stocks rallied higher.  On Wednesday, gold continued to push higher and we cashed out the rest of our December GLD calls.  However, on Thursday, the chip sector was downgraded and led the market lower.  DELL missed its earnings estimates after the market.  Both the financial and energy sectors turned weak.  On Friday (see Weekly Wrap of our published trades), the financials and techs stayed weak and the market retreated to close below SPX 1100. 

For the week, the Dow was up +47.69 points (!!); SPX slid 2.1 points; Nasdaq fell 21.84 points.  The dollar bounced a bit, although gold continued to make new highs closing above $1150/ounce.  Oil was slightly on the green side.  This evening, at the time of this writing, gold was trading higher again, above $1160/ounce!  Asian markets were mostly higher.  Let’s see where the US market stands after Friday’s close:

SPX

On Friday, SPX slid 3.52 points to close at 1091.38.  It closed below its 10-day MA.  The daily MAs went up, but, the MACD was down.

Nasdaq

Nasdaq fell 10.78 points to close at 2146.04.  It bounced off of its 30-day MA.  The MACD dropped lower.

The market retreated rather quickly at the end of the week, closing below the 10-day MA.  Both SPX and Nasdaq once again closed below the recent resistance levels (SPX 1100; Nasdaq 2190 to 2200).  The MACDs turned lower.  However, VIX closed below 23.  We have some mixed signals, a sign of consolidation, as I pointed out last Thursday.  For the new week…

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