In my Market Forecast this week, I said, "For the new week, the market should be looking for a bounce after the quick fall for the past 2 weeks. The above mentioned levels [SPX 1040; Nasdaq 2150] should be the first resistances. We could see some volatile trading to start the week."
Yesterday, the market gapped higher and tested SPX 1040, but, turned back lower in the afternoon. Today, the market tried again. This time, it succeeded in breaking above that 1040 level and kept on rallying until the close. Most sectors were higher. Financials, techs, commodity sectors were all very strong. GOOG added +14.13 while AAPL also rose $10. NFLX shot up more than +10%! VMW rallied +7.53% and CREE gained +8.38%. VECO soared +10.49%. Among the financials, GS managed to close above $135, up +2.7%; PNC rose +7.77%; WFC advanced +6%.
The Dow finished up +274.66 points; SPX jumped +32.21 points; Nasdaq gained +65.59 points:
XLF (financials) added +4.41%. SOXX (semiconductors) led the techs with an +5.05% increase. XME (metals and mining) gained +5.23%. OIH (oil services) bounced +4.15%. GLD (gold) and SLV (silver) traded higher. USO (oil) was up +3.19%. FXI (Chinese ADRs) was slightly higher.
With one big jump, the market is right back above the key levels. SPX is above 1040; Nadsaq is above 2150; and, the Dow is back above 10,000. VIX slumped down to close below 27. However, we have seen big one-day pops in the recent months as well (see the above SPX chart, on 5/10 and 5/27). These pops happened after consecutive days of heavy selling, and did not necessarily confirm immediate reversal. We should see resistance between SPX 1070 and 1080. Above 1080, SPX could turn bullish. This market is still very volatile and is still range-bound. Earnings season will get started next week and should become the market's focus and driving force.
Good night and HappyTrading! ™
Disclosure: no positions