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

|Includes: BAC, BLK, BTK, FCX, GS, PBW, STP, TSL, X, Financial Select Sector SPDR ETF (XLF), XME, YGE, ZOLT

Last weekend, in the Market Forecast, I wrote:

"For the new week, we have the Fed meeting on Wednesday.  The market still seems undecided and is showing mixed signals.  VIX, closing below 28, could start a new leg down.  On the other hand, energy sectors are showing weakness.  Financials are in neutral gear and could go either way.  Techs are stronger, but, have not been able to break higher.  SPX barely hung on to its 30-day MA last week.  Nasdaq did a little better, closing above its 20-day MA.  What we'll been watching in the new week is whether the indices can push above their 10-day MAs.  On the down side, we'll keep our eyes on the 30-day MAs for support.  For SPX, if the 30-day MA is broken, 900 could be tested.  In order for the market to go higher, I think we'll need to see strength in the commodity sectors."

Indeed, the market basically didn't go anywhere!  Techs were stronger and eked out a small gain.  VIX did go lower on a new leg down.  Energy sectors were mostly weaker.  On Monday, the market took a swift drop and SPX tested 900.  On Tuesday, commodity sectors bounced and propped up the market.  On Wednesday, the Fed did all it can to bring the market some encouragements.  On Thursday, the market staged a broad-based rally, with biotechs breaking out.  The week ended with light trading as techs pushed higher.

In the Sector Watch, I specifically mentioned BTK (biotech) as it was shaping up for a breakout.  AMGN and CELG continued to look good.  We also looked XME (metals and mining), which ended nearly flat for the week.  When XME was down big, the market took a dive on Monday.  As XME rebounded throughout the week, especially on Thursday, so did the overall market.

If you're reading my articles, the weekend Market Forecast + Sector Watch is the one series that you don't want to miss.  This is where we look ahead to see what possibilities are in store for the coming week.  Besides studying the market indices, we also search for sectors that may affect the overall market the most.  In addition, we often point out specific leading stocks within the sectors.

For the week, the Dow finished down 101.34 points; SPX slid just 2.33 points; Nasdaq impressively added +10.75 points.  Let's see where the market stands after Friday's close:


On Friday, SPX lost 1.36 points to close at 918.9.  It stayed above its 30-day MA.  Its MACD went up.


Nasdaq added +8.68 points to close at 1838.22.  It stayed above its daily MAs.  The MACD continued higher.

After one week of profit-taking, the market fought bravely to stop the bleeding this week.  VIX sank all the way down to below 26.  SFK (financial ultrashort) and SRS (real estate ultrashort) were basically flat.  At the time of this writing, the Asian markets were mostly flat to slightly lower.  For the new week...

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