Last weekend, in my Market Forecast, I said,
"For the new week, as mentioned last weekend, SPX 1120 will be the nearest resistance. The market has rallied quite far. Unless, there are really positive news to help push the market higher, SPX 1130 could be a tough resistance beyond the 1120. So, if SPX 1130 cannot be broken, we might see the market trading sideways for a few days. In the past couple of weeks, we have seen the commodity sectors lead the market higher. The tech stocks will be strong if the market is strong; but, so far, they have not been leading the "attack". If the financials can regain strength and become the leading sector, the market could push above SPX 1130. Another sector to watch is the biotechs."
Indeed, the market traded sideways, and the stronger sectors were the financials and the biotechs. The market started the week trading flat. On Tuesday, the unexpected drop in consumer confidence shook the market, which put the market on a more defensive mode. On Wednesday, the market managed a modest bounce. On Thursday, the market was hit by worse-than-expected economic news once again; this time, the jobless claims. The market was weak at the open, but, spent the rest of the day climbing higher. On Friday, the market was flat once again, although staying in the green. The weaker economic news did not give the market a chance to test SPX 1120. It did, however, managed to stay above SPX 1100, and thus, keeping the market in a tight range.
For the week, the Dow was down 77.09 points; SPX slid 4.68 points; Nasdaq slipped 5.61 points. Oil made some gains and gold was basically flat. The dollar pulled back a little. On Sunday evening, at the time of this writing, Asian market were mostly higher. Oil was slightly higher and gold was flat. Let's see how the US market looks after Friday's close:
Both SPX and Nasdaq are showing similar pictures. They both closed above their respective daily MAs; their 10-day MAs have risen above the 30-day MAs; and, their 20-day MAs have turned up. VIX dropped back down to below 20. For the new week...
To read the rest of this article, please subscribe to HappyTrading "Premium Articles" by going to the Premium Services (click here) page. If you are already a subscriber, please click here: Market Forecast 3/1/10.
Disclosure: positions: none