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Monday Wrap-Up: Danger Zone!

|Includes: DWA, GS, JPM, Marvel Entertainment Inc. (MVL), SVA, WFC

The US stock market opened down today, following the overnight weakness in Asia.  Commodity sectors were very weak.  Crude went below $70/barrel and gold dropped to $945/ounce before bouncing back to $950.  SPX tested 1015 and Nasdaq tested 2000 (as discussed in my Market Forecast last night).  The market did get a small bounce just before the close, led by the big names in the financial sector.  GS, WFC, and JPM all closed in the green (see Sector Watch).

This morning, Disney (NYSE:DIS) announced a $4 billion deal to acquire Marvel Intertainment (MVL).  DIS shares fell almost 3% while MVL jumped more than +25%!  Dreamworks (NASDAQ:DWA) saw its shares go up +6.53%.  SVA, a Chinese biopharmaceutical company, received an approval for its swine flu vaccine, sending its stock up +53.64%!

The Dow closed down 47.92 points; SPX slipped 8.31 points; Nasdaq fell 19.71 points:

Commodity sectors were really weak:  XME (metals and mining) -3.56%; OIH (oil services) -2.51%; XLE (energy) -1.94%; GDX (gold miners) -1.67%.  USO (oil) and UNG (natural gas) were both down.  BTK (biotehc) stood out by closing in the green.  XLF (financials) was almost flat.  FXI (Chinese ADRs) fell 1.26%.

SPX

SPX slipped 8.31 points to close at 1020.62.  It closed above its 10-day MA.  The MACD went down.

Nasdaq

Nasdaq fell 19.71 points to close at 2009.06.  It also managed to stay above its 10-day MA.  The MACD slid.

The market tested some key support levels today: SPX 1015 and Nasdaq 2000.  These same levels held up last Thursday as well.  Although the market did make a small bounce at the end of the day, it is not out of the "danger zone" yet.  VIX has risen above 25 and could test 28 again.  The theme has not changed on the market though.  Financials and techs are holding up.  But, the commodity sectors seem to determine the direction of the broader market.  I think the market needs another day or so to figure out which way it wants to go next.

Good night and HappyTrading! ™