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Market Forecast + Sector Watch: SPX, Nasdaq, XLF, XME, XLE, PBW

|Includes:PBW, XLE, Financial Select Sector SPDR ETF (XLF), XME

Last weekend, in my Market Forecast, I said,

"For the new week, we have to see how this swine flu fear affects the markets.  Both SPX and Nadsaq finished last week on a strong note.  Both charts are showing the MACD turning back up.  Techs and financials are still quite strong.  We'll have to see if energy-sectors can continue to push higher.  During these past two weeks, the market has had a hard time breaking above the key resistances: SPX 875 and Nasdaq 1700."

Early in the week, the market did indeed seem to be affected by the uncertainty surrounding the "swine flu".  But, on Wednesday, the market jumped with energy sectors pushing higher.  Techs and financials stayed strong.  On Thursday, the market rose above SPX 875 in the morning, and we cashed out on our gains before the market slid lower in the afternoon.  Thus, finishing off our April's trading on a high note!  On Friday, the energy sectors went up again, giving SPX's first close above 875 in 3 months!

In our Sector Watch last weekend, we also looked at XME (metals and mining), OIH (oil services), and USO (oil).  We continued to discuss the importance of the energy-related sectors to the health of this rally.  Energy sectors finally went higher and helped to sustain the rally's momentum.

For the week, the Dow finished up +136.12 points; SPX added +11.29 points; Nasdaq gained +24.41 points.  Both Nasdaq and SPX finished above their respective key resistances: SPX 875 and Nasdaq 1700!  Let's see how these indices look after Friday:

On Friday, SPX added +4.71 points to close at 877.52, above the 875 level.  Its 10-day MA went higher.

Nasdaq added +1.9 points to close at 1719.2.  Its daily MAs and MACD were up.

The market finally pushed higher with both Nasdaq and SPX closing above their key resistances.  This is a bullish sign for the market.  Energy sectors were strong last week.  Techs held up well also.  But, the financials stayed flat, ahead of the "stress test" results.  VIX slid lower.  SKF (financials ultrashort) was volatile within a tight range; it recorded a new all-time low, breaking below $54.  However, it bounced back and closed at $58.409.  At the time of this writing, Asian markets look very strong to start the new month.  For the new week...

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Stocks: XLF, XME, XLE, PBW