Last weekend, in my Market Forecast, I wrote:
"For the new week, the market is definitely struggling to bounce from May’s slump. However, Europe’s financial problems may be worse than that of the US, as China’s Premier warned of a possible double-dip in the global economy’s attempt to recover. Charts are certainly showing the same concerns. While last Thursday’s jump was encouraging, Friday’s slip back to the 10-day MA kept the market in a vulnerable position. BP’s inability to stop the oil leak can keep the energy sectors on their heels. The longer this disaster drags on, the weaker oil services will get. Without the energy sectors, the market will have difficulties trying to bounce. Once again, SPX 1080 will be an important level to watch. Below SPX 1080, the market could sink lower again to test 1040. At the end of the week, on Friday, we’ll get the latest unemployment rate report. The initial claims could provide some clues the day before. If the market is able to rise above the 1100 level, the next resistance is between 1120 and 1140. SPX will have to close above 1160 to become bullish."
Oil services were indeed weak and kept the energy sectors down as well. The market did attempt to bounce and tested the 1100 level. Monday was Memorial Day, a market holiday. On Tuesday, energy stocks pushed the market down. On Wednesday, the energy stocks bounced and helped the market make a reversal. On Thursday, the market was cautious ahead of the jobs report. But, Friday’s jobs report was disappointing and the market took a big drop to finish the week lower. We had a pretty good week trading on both sides, including a +116% on JOYG calls and a +54% on OIH puts.
For the week, the Dow was down 204.66 points; SPX lost 24.53 points; Nasdaq fell 37.87 points. Oil also slid. Gold saw a strong bounce on Friday and ended the week higher. At the time of this writing, Asian markets were mostly lower. Here’s how the US market looks after Friday’s close:
SPX
SPX lost 37.95 points to close at 1064.88. It closed below the daily MAs. The MACD turned down.
Nasdaq
Nasdaq tumbled 83.86 points to close at 2219.17. It managed to stay above the 2200 level, but, below its daily MAs. The MACD went down.
The market was looking like it was on its way for a bounce. Nasdaq went all the way up to its 20-day MA on Thursday. However, Friday’s slump brought market’s major indices below their respective daily MAs. VIX jumped back above 35. For the new week…
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