It was another volatile week, ending with the market indices mixed. Although ultimately the market indices ended the week little changed, the market did experience huge swings during the week!
Last week, in my Market Forecast, we discussed,
"For the new week, the downward momentum just picked up. SPX fell below 1280 and the next support is between 1260 and 1250. Nasdaq could test 2600 if the market sinks lower."
Sure enough, those support levels were tested.
On Monday, the market was flat, fighting to make a bounce. We cashed out our gains on the puts. On Tuesday, stocks rebounded strongly in the morning and held on to most of their gains. However, on Wednesday, the market tumbled right back down, and we added new positions on the downside. On Thursday, market tested important support levels (SPX 1260; Nasdaq 2600) and bounced. We took more profits on our downside plays. RIMM’s "very" weak earnings on Thursday pressured the tech stocks even more on Friday. Friday ended mixed, as financials bounced, but, techs slipped.
We had another week with strong results. While we traded more on the downside, we were very careful and did not get burned by the quick bounces. Here were the closed trades:
11:04 | HappyTrading RIMM ($28.07) Sold to Close 07P27.5 Jul 28 puts, at $1.31 +7%
01:00 | HappyTrading APKT ($62.20) Sold to Close 06P65 Jun 65 puts, at $3.20 +106%
12:39 | HappyTrading APKT ($62.45) Sold to Close 06P65 Jun 65 pust, at $3.00 +94%
06:52 | HappyTrading FSLR ($118.90) Sold to Close 06C120 Jun 120 calls, at $1.82 -21%
11:06 | HappyTrading BIDU ($119.95) Sold to Close 06P120 Jun 120 puts, at $3.10 +31%
08:53 | HappyTrading MCP ($47.80) Sold to Close 06P52.5 Jun 53 puts, at $5.00 +127%
For the week, the Dow was "up" +52.45 points; SPX added +0.55 point; Nasdaq fell 27.25 points. Gold went slightly higher, while oil went lower. At the time of this writing, Asian markets were mixed, with Hong Kong and Japan rebounding slightly. Let’s see how the US market looked after Friday’s close:
SPX
On Friday, SPX added +3.86 points to close at 1271.5. Its MACD flattened.
Nasdaq
Nasdaq fell 7.22 points to close at 2616.48. Its daily MAs and MACD went lower.
Although Nasdaq fell on Friday, it stayed above 2600; and, SPX closed 11 points above its support at 1260. For the new week…
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