Last weekend, in my Market Forecast, I said:
"For the new week, the momentum has completely shifted to the downside. We can see that the daily MAs in both SPX and Nasdaq are curving down. On Monday, we may see an attempt to bounce; others may call it a relief rally. First resistances will be SPX 1130 and Nasdaq 2300, both of which were tested on Friday morning, but failed. On the downside, the market could easily test the February lows, but it does have some soft supports along the way. Gold looks like it has more room to rise and can easily see a new all-time in the next couple of weeks."
Although the bounce was stronger than expected, the market did fall weak again by the end of the week. Gold did achieve new highs. On Monday, the market jumped on the $1 trillion rescue package for Europe. On Tuesday, Gold soared to a new all-time trading close to $1240/ounce. On Wednesday, the market got a follow-through on the rally. However, by Thursday afternoon, the market was weak again. On Friday, the market fell hard as problems in Europe caused more concerns. We were there to catch the trades on the downside and finished another solid week.
For the week, the market actually kept onto some gains. The Dow was up +239.73 points; SPX added +24.8 points; Nasdaq gained +81.21 points. As mentioned above, gold jumped to a new all-time high. Oil, however, plunged back to nearly $70/barrel. This evening, at the time of this writing, Asian markets were broadly lower. Let's take a look at the US market after Friday's close:
Although the bounce was strong last week, by the end of the week, the market turned down again. Both SPX and Nasdaq closed below their respective MAs, and the MACDs went lower. VIX jumped back above 31. Tonight, there are some important news that may affect the market. Greece is considering legal actions against US banks. BP announced a successful deployment of a mile-long tube to suck most of the oil from the leak. German Chancellor Angela Merkel said that the $1 trillion rescue package to prevent the Greek debt crisis from spreading only bought eurozone countries more time and did not solve their underlying debt problems. For the new week...
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