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Weekly Wrap + Market Forecast + Sector Watch: SPX, Nasdaq, XME, XLF, PBW, SOXX


Last weekend, in my Market Forecast, I wrote:

"For the new week, a whole lot more earnings reports are coming in...  The market is barely being supported by its daily MAs.  A quick dip could send it to test SPX 1040 again.  It'll be up to the earnings again.  Monday and Tuesday could induce big market moves with IBM, TXN, GS, YHOO, and AAPL in the spotlight.  This market is still very much range-bound.  On the upside, SPX will have to break above that 1100 level."

Indeed, the market traded in reaction to the earnings reports.  Most earnings turned out to be positive and the market closed just above that SPX 1100 level.  On Monday, in anticipation of good earnings from IBM and TXN, the market ended slightly higher.  However, after the market, although IBM and TXN delivered solid reports, the expectation was perhaps too high.  On Tuesday, both STLD and BTU reported great earnings and the commodity sectors rallied.  The market pushed higher and looked past IBM and TXN's earnings.  After the market, AAPL blew away the estimates with its quarterly results.  On Wednesday, things started out strongly as MS, FCX, and WFC all gave outstanding earnings.  But, the market experienced a quick selloff as Bernanke gave his testimony on the economy to Congress.  On Thursday, the market whipped around like a whirlwind and recovered Wednesday's quick loss in the first 30 minutes of trading!  CAT and UPS gave investors hope that the economy is recovering.  On Friday, the market appeared weak in the morning as some profit-taking took place.  However, it ended on a strong note and continued higher.

We only closed a few trades this week as the market swung wildly, up-and-down.  We got shaken out of a trade on VMW, which would have been a very nice winner.  The other closed trades were all on the green side:

July 21, 2010
08:27 | HappyTrading GOOG ($478.00) Sold to Close 08C500 Aug 500 calls, at $5.30 +4%

July 20, 2010
12:33 | HappyTrading GOOG ($482.20) Sold to Close 08C500 Aug 500 calls, at $6.80 +33%
08:36 | HappyTrading VECO ($38.80) Sold to Close 08C40 Aug 40 calls, at $2.90 +4%
08:25 | HappyTrading VMW ($70.90) Sold to Close 08C75 Aug 75 calls, at $2.55 -29%

July 19, 2010
12:17 | HappyTrading GOLD ($89.78) Sold to Close 08P90 Aug 90 calls, at $3.90 +8%
11:56 | HappyTrading GOLD ($89.60) Sold to Close 08P90 Aug 90 put, at $4.00 +11%
08:00 | HappyTrading AAPL ($240.30) Sold to Close 08P230 Aug 230 calls, at $9.30 +7%

For the week, the Dow was up +326.72 points; SPX added +37.78 points; Nasdaq gained +90.42 points.  Oil went up while gold was pretty much flat.  This evening, at the time of this writing, the Asian markets were mostly higher.  Here's how the US market looks after Friday's close:


On Friday, SPX added +8.99 points to close at 1102.66, just above the 1100 level.  The daily MAs turned up and the MACD went higher.


Nasdaq gained +23.58 points to close at 2269.57.  It closed above the 2250 level.  Its daily MAs and MACd curved up.

Both SPX and Nasdaq closed above their respective daily MAs, and above their key resistance levels (SPX 1100 and Nasdaq 2250).  But, we were here just last month when the market took a quick 2-week dive!  For the new week...

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Disclosure: no positions