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Weekly Wrap + Market Forecast + Sector Watch: SPX, Nasdaq, UUP, GLD, XLE, XME

|Includes: APA, ARCH, BHGE, BTU, CLF, DVN, GLD, HES, NOV, OXY, SLB, UPL, PowerShares DB USD Bull ETF (UUP), WLT, XLE, XME

Last weekend, in my Market Forecast, I said:

"For the new week, things get a bit tricky.  While earnings are still expected to be strong, the anxiety over possible financial reforms can cast a shadow on the market, especially over the financial sector...  I think we'll see some follow-through weakness on Monday.  In general, I'd expect stronger earnings from the tech stocks.  Depending on how the developments on Goldman's case (perhaps others?) and the financial reform issues go, the concerns in the financials may overshadow earnings.  If the 10-day MAs can hold up on Monday and Tuesday, I think we'll see buyers come back in on Wednesday, especially if AAPL reports good earnings.  However, if more unfavorable news come out in the financial sector, "sell on news" may happen even on good earnings."

Indeed, the earnings reports were mostly on the strong side, especially for the techs.  We did not get much new developments on Goldman's case and even the financials had a fairly good week.  On Monday, we did see some "follow-through weakness".  But, it only lasted through the morning.  In the afternoon, the market staged a dramatic turn-around and closed in the green!  On Tuesday, the market glided higher, expecting good news from AAPL.  After the market, AAPL delivered blowout earnings for its 1Q.  Both Nasdaq and SPX stayed above their respective 10-day MAs.  On Wednesday, the market opened higher, but, lost most of its gains before the close.  In the after-hours trading, reactions to AMZN and MSFT earnings were not so favorable.  On Thursday, the market sank lower at the open, but came back in the afternoon with another huge, positive, reversal in the afternoon.  On Friday, the market stayed strong; both SPX and Nasdaq closed at new highs for 2010.

I was on the "cautious" side and did not make many trades.  Here are the closed trades from last week:
07:14 | HappyTrading AIG ($44.80) Sold to Close 05C40 May 40 calls, at $5.90 +64%
12:29 | HappyTrading AIG ($43.20) Sold to Close 05C40 May 40 calls, at $4.70 +31%
08:38 | HappyTrading STEC ($14.50) Sold to Close 05C14 May 14 calls, at $1.48 +10%

For the week, the Dow was up +126.44 points; SPX added +25.15 points; Nasdaq gained +48.89 points.  One very important thing to note is that Nasdaq is back above the "pre-Lehman" (Sept. 2008) levels!!!  Both gold and oil experienced a late surge on Friday and ended the week higher.  At the moment of this writing, Asian market were mostly higher this evening, with the Nikkei 225 (Japanese Market) up more than +2%!  Both oil and gold are trading higher as well.  Here's how the US market looks after Friday's close:

SPX

SPX added +8.61 points to close at 1217.28.  Its daily MAs and MACD went higher.

Nasdaq

Nasdaq gained +11.08 points to close at 2530.15.  Its daily MAs and MACD also went up.

Both SPX and Nasdaq are at new highs.  VIX is still in the 16s.  For the new week...

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Disclosure: no positions