Wang’s Happy Trading

Last weekend, in my Market Forecast, I said,

"For the new week, the market still looks strong, but, may need a quick breather early in the week.  If the market can keep its altitude while taking a breather, it could easily end higher by the end of the week.  On the other hand, if the market pushes up on momentum early in the week, we may see some profit-taking before the year ends.  Remember Friday is the 1st of 2010 and it’s a market holiday.  Energy stocks still look very strong.  Financials started to go higher last week and could give the market the strength it needs to stay up.  The dollar got a bit toppy last week and could slide back down, in which case, gold and gold miners should bounce."

Indeed, the upwards momentum pushed the market up on Monday, and, we saw profit-taking by the week’s end.  The financials were stronger, especially GS, which was discussed in last weekend’s Sector Watch.  They helped to keep the market stay up until the last trading hour of the year, where we saw some quick pullbacks. 

The market ended the week, and the year, on a quick profit-taking.  For the week, the Dow was down 92.05 points, losing more than 70 points in the last hour!  SPX fell 11.38 points; and, Nasdaq lost 16.54 points.  Dollar actually went slightly higher, while gold fell lower.  Oil, on the other hand, gain some solid grounds.  This evening, at the time of this writing, Asian markets were mixed, but, stayed strong, with the Taiwanese Index still pushing higher while the Hang Seng (Hong Kong) was slightly negative.  Let’s see how the US market closed after its 2009 close:

SPX

On 12/31/09, SPX lost 11.32 points to close at 1116.1.  it closed just below its 10-day MA.  The MACD turned down.

Nasdaq

Nasdaq dropped 22.13 points to close at 2269.15.  It stayed above the 10-day MA, but its MACD went lower.

The quick pullback last Thursday was enough to turned the MACD on the market indices lower.  VIX quickly jumped to close above 21.  Last Thursday, before the quick pullback, I commented in the Trading Room:
December 31, 2009 11:47 AM
…hard to say where the market is going to open on Monday, but, SPX hourly chart is weak. VIX looks like could get a hop.

As if on cue, VIX popped less than 15 minutes after my comment!  For the new week…

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