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Market Forecast + Sector Watch: GLD, XME, MOO, XLF, CF, POT, MOS, MON, AGU, CLF, WLT, CAT, JOYG, GS, BLK, MA, V


Last weekend, in my Market Forecast, we discussed,

"For the new week, the market looks very weak, but, could perhaps use a bounce.  News that France and Germany are looking at new options to help combat with the financial crisis in Europe may inspire a bounce in world markets.  But, unless there are solid solutions coming out of Europe, this bounce is not likely to hold."

On Monday, the market did get a big bounce on the new efforts in Europe.  The market took a rest on Tuesday, and we locked in some profits.  On Wednesday, global central banks took a collective action to pump liquidity into the global financial systems and stocks jumped even more.  The market took another breather on Thursday ahead of US' unemployment rate report.  We continued to lock in profits.  Friday brought a nice surprise as the unemployment rate dropped to 8.6%, below the dreaded 9%.  But, as expected, the market could not make further advance without some consolidation.

Nevertheless, the market had a tremendous week, the best in almost 3 years!  The Dow was up +787.64 points; SPX added +85.61 points; Nasdaq gained +185.42 points.  We also did very well, finishing another perfect week with 100% of the trades in profit.

Gold managed a small bounce, trading near $1750/ounce.  Oil powered back to $100/barrel.  This evening, Asian markets were mixed, at the time of this writing.  Let's take a look at where the US market closed on Friday:


On Friday, SPX slid 0.3 points to close at 1244.28.  The 10-day MA turned up and the MACD went higher.


Nasdaq added +0.73 points to close at 2626.93.  It closed right at its 30-day MA.  The MACD glided up.

It was apparent that the global governments knew that they had to step in to prevent global financials markets from breaking down further.  The collaborative efforts from the global central banks quickly turned the markets back up.  The question now is, "Can the markets keep the momentum going?"  Next week is going to be a crucial week, as EU leaders meet to try to save Europe's currency union.  This evening, Italian PM Monti unveiled a 30 billion euro package of austerity measures to shore up Italy's strained public finances and help to stem a debt crisis threatening to overwhelm the euro zone.  For the new week...

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