Last weekend, in my Market Forecast, I said,
"For the new week, the market can run further into its newly developed bullish formation. The market has already stuttered around the SPX 1120 to 1130 area for a long time. If it's going to break higher, it'll have to catch the daily upper BB. This will mean breaking above 1130 first; so, that's the first resistance."
Indeed, that 1130 was the resistance. SPX got as high as 1129.94!! The Fed gave no surprises and kept the interest rates at historic lows. However, a slew of disappointing economic data prompted a big selloff on the market. On Monday, the market crawled higher to test SPX 1130. It was not able to break it. On Tuesday, the market was weak in the morning, but, bounced back up after the Fed announcement. On Wednesday, the market focused on the economic data from China, which showed slowing industrial growth, and tumbled. The market traded slightly lower on Thursday and Friday on low volumes.
We salvaged this week by quickly getting out of longside trades and hopping on shortside trades on Wednesday morning. We did a nice triple-digit profit trade on ICE puts:
August 12, 2010
09:08 | HappyTrading CLF ($59.00) Sold to Close 08057.5 Aug 58 puts, at $1.41 -12%
06:34 | HappyTrading ICE ($100.60) Sold to Close 080105 Aug 105 puts, at $5.20 +117%
August 11, 2010
01:02 | HappyTrading ICE ($102.00) Sold to Close 08P105 Aug 105 puts, at $4.00 +67%
12:48 | HappyTrading ICE ($101.80) Sold to Close 08P105 Aug 105 puts, at $4.20 +75%
06:44 | HappyTrading WYNN ($89.10) Sold to Close 08C90 Aug 90 calls, at $1.90 -46%
06:35 | HappyTrading GOOG ($495.00) Sold to Close 08C510 Aug 510 calls, at $2.40 -56%
August 10, 2010
07:56 | HappyTrading QCOM ($39.60) Sold to Close 08C38 Aug 38 calls, at $1.80 +6%
For the week, the Dow was down 350.41 points; SPX lost 42.39 points; Nadsaq fell 114.99 points. Oil had a huge drop, back down to the $75 level. Gold rose up above $1215/ounce. This evening, at the time of this writing, Asian markets were mostly lower; but, Shanghai (Chinese) market is higher. Here's how the US market looks after Friday's close:
Both SPX and Nasdaq closed below their respective daily MAs. The 10-day MAs turned lower. The MACDs crossed over to the bearish side. VIX jumped back above 26. For the new week...
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