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Market Forecast + Sector Watch: SPX, Nasdaq, USO, GLD, XME, XLF, APA, HES, UPL, SWN, WLT, ANR, ACI, BTU, MEE, PCX, AIG

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Happy New Year!

Last weekend, in my Market Forecast, I wrote:

"For the new week, the technicals look toppy for the market indices.  We'll have to see how things react to China's interest rate hike.  There seem to still be fund managers chasing performance.  While toppy, mining and energy sectors still look strong.  Agriculture sector just broke out on Thursday.  If the market does pull back, the immediate support for SPX is 1240.  If 1240 does not hold, 1220 could be tested.  If the market pushes higher, we may see SPX 1280 tested."

China's rate hike did not affect the US market much last week.  Mining, energy and agriculture sectors pushed higher.  On Monday the market was flat.  On Tuesday, we saw some weakness in the techs, but, metals were strong as gold and silver broke out higher.  On Wednesday, agriculture stocks pushed higher and we caught some nice winners.  On Thursday and Friday, the market experienced some profit-taking; weakness was mainly in the tech stocks.

For the week, the Dow was up +4.02 points; SPX added just +0.87 point; Nasdaq was down 9.9 points.  Both gold and oil went higher.  Gold closed just above $1420/ounce; oil was near $92/barrel.  At the time of this writing, Asian markets were mostly higher.  China's manufacturing data dipped slightly in December, easing the fear of inflation.  Japan's Nikkei was down, however.  Let's take a look at how the US market closed on Friday:


On Friday, SPX slid 0.24 point to close at 1257.64.  The MACD was down slightly and the daily MAs went higher.


Nasdaq slipped 10.11 points to close at 2652.87.  The MACD went down and the 10-day MA flattened.

Both SPX and Nasdaq saw some slight weakness towards the end of the week.  VIX tested 18, but, did not close above.  For the new week...

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