The S&P 500 Index lost 13.88 points for the week ending July 16th, 2010. While this decline in the broad based index does not sound like much, the week was full of surprises. Last week we had mentioned that it was options expiration and the week should be choppy and volatile. As you probably know by now the market tanked on Friday July 16th as options expiration was coming to a close. The decline was for a drop of over 31.00 points on the S&P 500 Index. This decline erased all of the earlier gains from the prior four trading days. Often that is what occurs during options expiration week as the institutional money will usually play a lot of games to catch the novice trader or investor off guard. This coming week should also be filled with many surprises as we are now in the heart of corporate earnings season. So far a decent low was made in early July and price still remains above that level. Should the S&P 500 Index close below that level then this market is likely to experience a lot more fear and selling. Note the SPDR S&P 500 ETF (NYSE:SPY) for an alternative means of profiting from the S&P500 swings.
Newmont Mining Corporation (NYSE:NEM) sold off sharply losing over 3.00 points for the week and reversing all of last week's gains. Currently Newmont Mining Corp has a reversal week bar in place on the chart. The stock could trade as low as the $56.00 - $55.00 level before finding good near term support. This stock should rally when the stock market indexes rally due to its inflationary nature. Newmont mining is also the leading gold mining stock in its sector and often traders will buy gold and gold mining stocks in times of fear. The weekly chart for Newmont Mining Corp is still in an uptrend as price is still trading above the weekly 20, 50, and 200 moving averages. Therefore, any decline in the stock could just be a weekly pullback as the chart still it remains in a good technical position.
Broadcom Corporation (NASDAQ:BRCM) pulled back late last week along with most technology stocks. The current pattern on the weekly chart could be a possible topping tail. This stock has been one of the strongest technology names in 2010 and still remains above all the major weekly moving averages. Should Broadcom Corp pull back or correct from recent highs the stock should have good weekly support around the $32.00 area. Continue to follow this stock as it is still showing good relative strength compared to the major stock indexes. Therefore, should the market indexes experience any bounces this stock is likely to lead the rally.
Netflix, Inc (NASDAQ:NFLX) is one stock that actually closed the week higher. However, Netflix Inc did sell off on Friday July 16th along with almost every other stock in the market. Netflix Inc has taken a lot of market share from its peers in 2010 and it shows in the weekly chart. The stock still remains above the weekly 20, 50, and 200 moving averages. This leading stock is still a little extended at this time and may need to base for a while before making another sustainable move higher. The weekly resistance levels for Netflix Inx are $130.00, $135.00 and $140.00. Should the stock decline it should have near term weekly support around the $106.00 area.
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