billbigD November 6, 2009 12:45 PM
GLD- Happy very nice on those two GLD trades before the India announcement. Congrats

We also did very well on GOOG.  Here are the closed trades for the week (trades with above +50% gain are highlighted):

November 06, 2009
07:04 | HappyTrading GOOG ($551.00) Sold to Close GOPKY Nov 550 calls, at $10.00 +59%
06:55 | HappyTrading GOOG ($549.20) Sold to Close GOPKY Nov 550 calls, at $8.80 +40%

November 04, 2009
12:58 | HappyTrading GLD ($107.10) Sold to Close GCZKZ Nov 104 calls, at $3.90 +95%
12:12 | HappyTrading GLD ($107.52) Sold to Close GCZKZ Nov 104 calls, at $4.25 +113%
08:06 | HappyTrading GLD ($107.20) Sold to Close GCZKZ Nov 104 calls, at $4.10 +105%
08:04 | HappyTrading GOOG ($544.50) Sold to Close GOPKY Nov 550 calls, at $8.20 +30%
08:03 | HappyTrading GLD ($107.10) Sold to Close GCZLA Dec 105 calls, at $4.50 +64%

November 03, 2009
01:00 | HappyTrading GLD ($106.45) Sold to Close GCZKZ Nov 104 calls, at $3.50 +75%
12:58 | HappyTrading GLD ($106.40) Sold to Close GCZLA Dec 105 calls, at $4.05 +47%
12:26 | HappyTrading GLD ($106.33) Sold to Close GCZKZ Nov 104 calls, at $3.40 +70%
11:11 | HappyTrading AMZN ($118.90) Sold to Close QZNWC Nov 115 put, at $3.05 -22%
06:47 | HappyTrading V ($76.20) Sold to Close VKO Nov 75 calls, at $2.80 -26%

November 02, 2009
08:50 | HappyTrading BIDU ($377.00) Sold to Close BPJWL Nov 360 put, at $8.40 -12%

The Dow closed above 10,000 for the first time since early Oct 2008.  Perhaps not a big deal, but, pretty good considering it’s a Friday and the unemployment report was not so good.  I’ll wait to cheer when SPX clears 1100!

I’ll be back on Sunday with my weekly Market Forecast!  Have a great weekend everyone!

Good night and HappyTrading! ™

November 5, 2009 6:58 AM
good morning!

market
nice economic data this morning; market should have a solid day to test SPX 1060 to 1070 region.

Indeed, SPX closed at 1066.65 today.  The Dow went all the way to close above that 10,000 mark!  Last night, in my evening article, I said, "One thing to note is that FXI (Chinese ADRs) gained +1.5%.  The Chinese stock market has regained its footing and could be ready to test the high set back in August this year."  FXI (Chinese ADRs ETF) added another +2.36% today.  Among the top winners in Chinese stocks were:  TSL +6.22%, YGE +2.95%, STP +3.93%, FMCN +4.7%, CHU +4.23%, HMIN +5.97%, CYD +5.43%.

After the market, Blue Nile (NILE), an online jewelry company, reported rising sales and a higher profit for 3Q.  NILE shares went up +3.88% in after-hours on top of the +3.76% gain in the regular session.  SBUX raised its earnings target for 2010 along with a quarterly report that beat the estimates.  SBUX shares traded +3.86% higher this evening on top of the +2.55% gain during the day.

The Dow finished up +203.82 points; SPX added +20.13 points; Nasdaq jumped +49.80 points:

As expected GLD (gold) and SLV (silver) were flat (see last night’s article).  Techs were strong with INX2 gaining +3.25% and SOXX (semiconductors) adding +2.59%.  XME (metals and mining) advanced +3.15%.  OIH (oil services) was up +2.04%.  PBW (clean energy) hopped +3.85%.  XLF (financials) rose +2.57% while HGX (housing) tacked on +2.77%.

SPX

SPX added +20.13 points to close at 1066.63.  It closed above the 30-day MA.  Its MACd turned up.

Nasdaq

Nasdaq jumped +49.8 points to close at 2105.32.  It closed above the 10-day MA.  The MACD turned higher.

I think it is interesting to see how well Blue Nile and Starbucks did this quarter.  Blue Nile further confirms what Amazon (AMZN) reported just two weeks ago, that consumers are shopping more and more online!  Both companies are seeing a strong holiday season.  Further, Blue Nile demonstrated that people are still buying jewelry!  What Starbucks reported is perhaps even more interesting.  Consumers are more willing to spend money on gourmet coffee again.  These are certainly encouraging data for the economic recovery.  Tomorrow, the market will get more jobs data including the unemployment rate.  Consumer credit will also be reported in the afternoon.  VIX came further down today, but, still closed above 25.  We’ll see if the unemployment rate report can confirm the positive trend set by the recent slew of better economic data.

Good night and HappyTrading! ™

angar November 4, 2009 6:58 AM
Good morning happy. are you expecting rally after Fed meeting today?

I replied:
November 4, 2009 7:18 AM
Fed
don’t have big expectations, besides volatility, but, if SPX can close around 1060, it’ll be encouraging…

market
I think it’ll still take a few more days to sort things out, unless what the Fed says and jobs data on Friday is exceptionally good. we’ll need to see SPX above 1070 to really rally.

As expected, the Fed left interest rates unchanged, at historical lows.  Also as expected, the market went through quick volatile swings in the afternoon.  Right after the announcement, the market first went lower, then, higher, and then, lower again!  Nevertheless, we took advantage of the rising gold and continued to lock in gains on GLD, in addition to a quick trade on GOOG:

November 04, 2009
12:58 | HappyTrading GLD ($107.10) Sold to Close GCZKZ Nov 104 calls, at $3.90 +95%
12:12 | HappyTrading GLD ($107.52) Sold to Close GCZKZ Nov 104 calls, at $4.25 +113%
08:06 | HappyTrading GLD ($107.20) Sold to Close GCZKZ Nov 104 calls, at $4.10 +105%
08:04 | HappyTrading GOOG ($544.50) Sold to Close GOPKY Nov 550 calls, at $8.20 +30%
08:03 | HappyTrading GLD ($107.10) Sold to Close GCZLA Dec 105 calls, at $4.50 +64%

We are now completely out of the GLD November 104 calls.  These options traded as high as $4.3 and closed at $3.85.  I think gold may need to trade sideways a bit before going higher, although it may test $1100 this week.  It got to above $1095 intraday today.  With the Fed keeping interest rates at nearly zero, more investors will be looking to move money into gold.  The dollar fell after Fed’s announcement today.

After the market, CSCO easily beat the estimates with its earnings report and gave encourage assessments on the economic recovery.  CSCO shares went up +2.83% in after-hours trading.  QCOM reported earnings below the estimates.  However, its shares went about +1% higher.  NWSA delivered positive earnings and traded higher by +3.37% after the news.  PRU reported a 3Q profit that was above expectations, although its shares did not move much this evening, +0.41%.

The Dow was up +30.23 points; SPX added +1.09 points; Nasdaq slid 1.8 points.  Most sectors hovered around the flatline as the broader market.  One thing to note is that FXI (Chinese ADRs) gained +1.5%.  The Chinese stock market has regained its footing and could be ready to test the high set back in August this year.  SOXX (semiconductors) bounced up to test 300 today, but, was not able to close above (discussed this weekend in Sector Watch).  We’ll need to see if the semiconductors can respond positive to CSCO’s earnings.

Both SPX and Nasdaq charts show little new information tonight, so, we’ll look at them another day.

After 2 weeks of selling, the market needs to work off the downward momentum in order to go higher.  This at least partially contributes to the sideways trading in the past few days.  We still have jobless claims (tomorrow) and unemployment rate (Friday) data later this week.  So, the market still appeared to be undecided today.  VIX did come down to close below 28, but, will need to go below 25 to draw more buyers in.  In the mean time, we’ll hold a healthy cash position and see how the techs respond to CSCO’s earnings tomorrow.

Good night and HappyTrading! ™

tc924 November 3, 2009 6:41 AM
gold is on the move

HappyTrading November 3, 2009 7:36 AM
ABX
really strong; good earnings last week…

GLD
breaking out…

We went in on a couple of nice trades on GLD (gold ETF) and cashed out on intraday gains as high as +75%:

November 03, 2009
01:00 | HappyTrading GLD ($106.45) Sold to Close GCZKZ Nov 104 calls, at $3.50 +75%
12:58 | HappyTrading GLD ($106.40) Sold to Close GCZLA Dec 105 calls, at $4.05 +47%
12:26 | HappyTrading GLD ($106.33) Sold to Close GCZKZ Nov 104 calls, at $3.40 +70%
11:11 | HappyTrading AMZN ($118.90) Sold to Close QZNWC Nov 115 put, at $3.05 -22%
06:47 | HappyTrading V ($76.20) Sold to Close VKO Nov 75 calls, at $2.80 -26%

GLD ended up +2.41% for the day.  SLV (silver ETF) charged +5.2% higher.  The gold and silver miners also did very well:  ABX +7.29%, AEM +7.53%, GOLD +7%, PAAS +7.67%.  Solar stocks were active today.  CSIQ received an upgrade today and jumped +11.71%.  Chinese solar stocks also saw decent gains:  TSL +10.91%, YGE +4.64%, STP +2.67%.

Rail stocks got a big boost today from Buffet’s $26 billion buy for the rest of BNI shares, paying $100 per share, a $31.5% premium to Monday’s close price.  BNI vaulted +27.51% to close at exactly $97.  CSX closed +7.31% higher, while UNP added +7.9%.

The Dow ended down 17.53 points; SPX added +2.53 points; Nasdaq gained +8.12 points:

Commodity sectors bounced today, led by GDX (gold miners) with a +7.7% rise.  OIH (oil services) gained +2.55% while USO (oil) was up +1.63%.  XME (metals and mining) tacked on +3.34%.  BTK (biotechs) added +3.46% for the techs.  XLF (financials) was flat.  FXI (Chinese ADRs) slid slightly.

SPX

SPX added +2.53 points to close at 1045.41.  Its 10-day MA and MACD went lower.

Nasdaq

Nasdaq gained +8.12 points to close at 2057.32.  Its daily AMs and MACd slid.

The market managed to close in the green today, but, was basically unchanged.  It seems to be sheepishly waiting to hear what the Fed will say tomorrow.  Before the Fed, there are more new economic data in the morning:  ADP employment report, ISM Services, and Crude Inventories.  After the market, CSCO will report earnings.  So, there will be a lot of things for the market to digest tomorrow.  After two weeks of selling, the market certainly has room to rise.  Most sectors bounced today, but, semiconductors remained weak (cautious statements from Morgan Stanley).  Semiconductors are good indicators on techs; so, keep an eye on these.  Even though gold made a new record high today, the dollar managed to go slightly up.  We’ll also be watching how the dollar will move to the Fed’s statements tomorrow.

Good night and HappyTrading! ™

"For the new week, I think the recent consolidation has been healthy.  The market will start the new week in a bit more vulnerable position.  With VIX above 22, it can easily test 23 to 24 area.  If SPX 1080 and Nasdaq 2150 can hold, we could see the market bounce to test SPX 1100 again; if not, the 20-day and 30-day MAs could be tested.  On the upper end, the story is still the same.  The market will need to break SPX 1100 to go higher.  Financials, energies, and the miners lost some grounds last week, and, will be among the key sectors to watch….

Some major sectors are barely hanging on to their support levels.  We’ll need to see some positive earnings reports for those levels to hold.  So, be more careful in the new week."

Earnings in the commodity sectors, especially the energies and oils, turned out to be weaker than expected.  On Monday, the dollar showed strength and the commodity sectors started to slide.  But, the market did its best to hold SPX 1080 and Nasdaq 2150.  On Tuesday, the market broke below those support levels, and, the market tone became much more cautious.  On Wednesday, commodity sectors added to their downward momentum.  On Thursday, the GDP report showed some promise for the US economic recovery, and the market bounced.  On Friday, the sellers returned and the market closed below some major support levels. 

For the week, the market ended lower, losing majority of the points on Friday.  The Dow ended down 254.45 points; SPX fell 43.41 points; Nasdaq dropped 109.36 points.  The Dow did finish the month flat while SPX and Nasdaq lost some grounds.  The dollar has risen from the lows.  Oil and gold slid a bit.  At the time of this writing, Asian markets were on the weaker side, but, had bounced from earlier lows.  Let’s see how SPX and Nasdaq look after Friday’s close:

SPX

SPX tumbled 29.92 points to close at 1036.19.  It closed below the 1040 level.  The MACD continued lower.

Nasdaq

Nasdaq sank 52.44 points to close at 2045.11, below the 2050 level.  The MACD curved down.

Both SPX and Nasdaq closed below their daily MAs.  What’s worse is that they closed below major support levels:  SPX 1050 and Nasdaq 2100.  Nasdaq is even weaker, closing a notch lower, below 2050, the September low.  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 11/02/09.

October 30, 2009
10:46 | HappyTrading BIDU ($378.20) Sold to Close BPJWL Nov 360 put, at $9.20 +31%
09:48 | HappyTrading FXI ($42.00) Sold to Close FXIKR Nov 44 calls, at $0.65 -62%
09:17 | HappyTrading GOOG ($542.00) Sold to Close GOPKN Nov 570 calls, at $2.90 -38%
08:37 | HappyTrading GOLD ($65.90) Sold to Close GUDKO Nov 75 calls, at $0.70 -72%

October 28, 2009
09:54 | HappyTrading GS ($172.00) Sold to Close GPYWN Nov 170 put, at $4.85 +3%

October 27, 2009
11:09 | HappyTrading FSLR ($148.60) Sold to Close HJQKK Nov 155 calls, at $7.60 -28%

October 23, 2009
01:01 | HappyTrading MA ($230.40) Sold to Close MALKF Nov 230 calls, at $9.80 +15%
12:56 | HappyTrading GOOG ($554.00) Sold to Close GOPKN Nov 570 calls, at $7.00 +12%
11:50 | HappyTrading GOOG ($555.50) Sold to Close GOPKN Nov 570 calls, at $7.20 +15%
08:52 | HappyTrading MA ($230.90) Sold to Close MALKF Nov 230 calls, at $10.00 +18%

October 21, 2009
07:14 | HappyTrading GOOG ($557.75) Sold to Close GOPKN Nov 570 calls, at $8.00 +28%

October 16, 2009
06:45 | HappyTrading BAC ($17.40) Sold to Close BYOJQ Oct 17 calls, at $0.44 -62%

October 15, 2009
12:56 | HappyTrading GOOG ($528.50) Sold to Close GOPKA Nov 600 calls, at $3.10 -3%
12:18 | HappyTrading AIG ($44.80) Sold to Close IKGJS Oct 45 calls, at $0.53 -54%
07:28 | HappyTrading CNX ($50.50) Sold to Close SDFJW Oct 48 calls, at $2.55 +28%

October 14, 2009
12:51 | HappyTrading BAC ($18.57) Sold to Close BYOJQ Oct 17 calls, at $1.60 +50%
12:32 | HappyTrading GOOG ($535.30) Sold to Close GOPKA Nov 600 calls, at $4.60 +44%
11:51 | HappyTrading AEM ($71.95) Sold to Close AEMJN Oct 70 calls, at $2.40 +13%

October 09, 2009
12:26 | HappyTrading BIDU ($427.70) Sold to Close BPJJF Oct 430 calls, at $9.00 +17%
12:09 | HappyTrading BIDU ($427.50) Sold to Close BPJJF Oct 430 calls, at $8.80 +14%
11:04 | HappyTrading FSLR ($155.50) Sold to Close HJQJJ Oct 150 calls, at $7.60 +12%

October 08, 2009
12:35 | HappyTrading FSLR ($156.80) Sold to Close HJQJJ Oct 150 calls, at $9.10 +34%
11:16 | HappyTrading ESI ($112.90) Sold to Close ESIJB Oct 110 calls, at $4.70 +24%
08:45 | HappyTrading ESI ($113.60) Sold to Close ESIJB Oct 110 calls, at $5.20 +37%
08:42 | HappyTrading CNX ($49.93) Sold to Close SDFJW Oct 48 calls, at $2.75 +38%
08:20 | HappyTrading ESI ($113.30) Sold to Close ESIJB Oct 110 calls, at $5.00 +32%

October 07, 2009
08:54 | HappyTrading GOOG ($504.80) Sold to Close GOPJO Oct 500 calls, at $17.50 +75%
07:55 | HappyTrading GOOG ($502.80) Sold to Close GOPJO Oct 500 calls, at $16.00 +60%

October 06, 2009
12:47 | HappyTrading GOOG ($498.40) Sold to Close GOPJO Oct 500 calls, at $14.00 +40%
08:11 | HappyTrading AEM ($71.64) Sold to Close AEMJN Oct 70 calls, at $3.60 +69%
07:17 | HappyTrading AEM ($71.10) Sold to Close AEMJN Oct 70 calls, at $3.20 +50%
07:13 | HappyTrading AEM ($70.50) Sold to Close AEMJN Oct 70 calls, at $2.90 +36%

October 01, 2009
12:47 | HappyTrading FSLR ($144.90) Sold to Close HJQJJ Oct 150 calls, at $4.40 -51%
12:44 | HappyTrading AAPL ($182.60) Sold to Close APVJR Oct 190 calls, at $2.16 -40%
09:58 | HappyTrading BLK ($213.30) Sold to Close BDWJU Oct 210 calls, at $8.00 +38%

September 30, 2009
12:53 | HappyTrading ISRG ($262.70) Sold to Close AXVJX Oct 260 calls, at $10.50 +33%
12:28 | HappyTrading BLK ($216.00) Sold to Close BDWJU Oct 210 calls, at $10.00 +72%
11:17 | HappyTrading ISRG ($263.80) Sold to Close AXVJX Oct 260 calls, at $11.00 +39%

September 29, 2009
08:42 | HappyTrading BLK ($214.50) Sold to Close BDWJU Oct 210 calls, at $9.20 +59%

September 25, 2009
12:54 | HappyTrading ISRG ($258.80) Sold to Close AXVJX Oct 260 calls, at $10.00 +27%
11:54 | HappyTrading PCLN ($160.30) Sold to Close PNEVL Oct 160 calls, at $5.50 -10%

September 24, 2009
08:17 | HappyTrading AAPL ($184.60) Sold to Close APVJR Oct 190 calls, at $4.10 -20%
07:38 | HappyTrading SOHU ($68.15) Sold to Close TKZJN Oct 70 calls, at $2.10 -42%
07:02 | HappyTrading ICE ($95.90) Sold to Close IHHJT Oct 100 calls, at $2.70 -40%

September 23, 2009
12:32 | HappyTrading DNDN ($28.58) Sold to Close UQBJB Oct 28 calls, at $2.70 -33%
08:09 | HappyTrading WYNN ($72.70) Sold to Close UWYJO Oct 75 calls, at $4.01 +3%
08:03 | HappyTrading CNX ($46.95) Sold to Close SDFJW Oct 48 calls, at $2.05 -34%

September 22, 2009
11:05 | HappyTrading FSLR ($157.20) Sold to Close HJQJL Oct 160 calls, at $7.60 +6%
09:34 | HappyTrading WYNN ($73.70) Sold to Close UWYJO Oct 75 calls, at $4.70 +21%
09:13 | HappyTrading WYNN ($73.40) Sold to Close UWYJO Oct 75 calls, at $4.50 +15%

September 21, 2009
12:05 | HappyTrading AIG ($48.00) Sold to Close IKGJN Oct 40 calls, at $11.00 +29%
11:43 | HappyTrading AIG ($46.82) Sold to Close IKGJN Oct 40 calls, at $10.00 +18%
11:27 | HappyTrading AIG ($46.30) Sold to Close IKGJN Oct 40 calls, at $9.60 +13%

Happy Halloween!  I’ll update the Trade Records page this weekend.
HappyTrading! ™

After the market, PCLN was named as the replacement for Schering-Plough in the S&P 500, sending its shares up +4.54% in after-hours trading.  CLF reported better-than-expected earnings and traded +4.53% higher.  In our Trading Room, I mentioned that the estimates were too low on CLF:

October 29, 2009 9:14 AM
CLF
up +7.7%; earnings later today; I think the estimates are low on this one…

LVS also beat the estimates with its earnings and provided bullish outlook.  LVS shares went up +8.4% after the news.  Both WYNN and MGM also traded higher.  MGM will report earnings on Nov. 5, next Thursday, before the market opens.

The Dow ended up +199.89 points; SPX jumped +23.48 points; Nasdaq gained +37.94 points:

Commodity sectors closed solidly higher:  XME (metals and mining) +5.01%, GDX (gold miners) +4.61%, XLE (energy) +2.66%, OIH (oil services) +3.35%.  USO (oil), UNG (natura gas), GLD (gold), SLV (silver) were all higher.  XLF (financials) added +4.18% while HGX (housing) advanced +2.56%.  FXI (Chinese ADRs) rose +2.47%.

SPX

SPX added +23.48 points to close at 1066.11.  It closed right at its 30-day MA.  The MACD was lower.

Nasdaq

Nasdaq gained +37.94 points to close at 2094.55.  It closed just below the 2100 level.  Its MACD slid.

The market had a nice bounced today, cheering the GDP report showing economic growth for the first time in a year!  Commodity sectors took SPX right back above that 1050 level, while Nasdaq closed just below 2100.  Investors went for the biggest names in the markets, driving the Dow up almost to even for the week and less than 40 points from that 10,000 psychological level.  VIX came down more than 11% to close below 25.  While the initial bounce was strong, since the recent fall was so sharp, we’ll need to see continuing strength to challenge to recent highs in order to turn the daily MAs (moving averages, see charts above) back up again.

Good night and HappyTrading! ™

After the market, FSLR delivered earnings with revenue below the estimates.  Its shares were down more than 15% in after-hours trading.  AKAM, on the other hand, beat the estimates with its earnings and outlook.  Its shares jumped +9.23% after the report.

The Dow finished the day down 119.48 points; SPX stumbled 20.78 points; Nasdaq tanked 56.48 points:

The miners led the market in its decline.  XME (metals and mining) was down 5.47% while GDX (gold miners) lost 5.85%.  Both USO (oil) and UNG (natural gas) traded lower, -2.78% and -4.34%, respectively.  OIH (oil services) fell 4.41%.  XLF (financials) dropped 3.1% and HGX (housing) slipped 4.81%.  SOXX (semiconductors) was down 2.8%.  FXI (Chinese ADRs) slid 3.81%.

SPX

SPX fell 20.78 points to close at 1042.63.  It closed below the 1050 level.  The MACD curved down.

Nasdaq

Nasdaq tumbled 56.48 points to close at 2059.61.  Its daily MAs started to turn lower.  Its MACD was down as well.

Since August, for the past 3 months, the market has been consolidating at the end of the month.  The drop has been quick.  But, this fall was particularly sharp, going from new breakout highs back to below the support levels in September, which were SPX 1050 and Nasdaq 2100.  Asian markets followed the US down this evening.  VIX found some resistance at 25 yesterday, but, pierced through today.  In our Trading Room this morning, I commented:

October 28, 2009 8:36 AM
VIX
seems like it could hit 28 from here, although intraday charts are really toppy…

VIX closed at 27.91 today.  Tomorrow, we’ll get both the GDP and jobs data, which would likely help determine the direction for the market for the rest of the year.  If the market does not snap back up right away, the market would lose the momentum of its recent uptrend, in which case, SPX could easily test 1000 by the year’s end.  We will should see some bounces tomorrow, but, the question is will the bounces last and be strong enough to overturn this week’s sharp fall.

Good night and HappyTrading! ™

This morning, SOHU reported disappointing earnings and saw its shares swoon 16%!  After the market, another Chinese internet company got hammered!  BIDU reported a solid quarterly profit but its guidance was soft.  BIDU shares tumbled almost $57 in after-hours trading!  LULU raised its earnings forecast and its shares jumped +6.38%.

The Dow was down 104.22 points; SPX fell 12.65 points; Nasdaq lost 12.62 points:

GDX (gold miners) led the commodity sectors lower, down 4.28%.  Others did not fare well either:  OIH (oil services) -2.24%, XLE (energy) -1.65%, XME (metals and mining) -2.8%.  Both USO (oil) and UNG (natural gas) were down.  GLD (gold) and SLV (silver) lost grounds as well.  XLF (financials) dropped -2.58%.  FXI (Chinese ADRs) slipped 0.92%.

SPX

SPX lost 12.65 points to close at 1066.95.  It closed below the 1080 level.  The MACD curved down.

Nasdaq

Nasdaq fell 12.62 points to close at 2141.85.  It closed below the 2150 level.  Its MACD went down.

As the dollar bounced, commodity sectors came under pressure.  Financials were also weak.  These were discussed in the Sector Watch last night.  Even though the market was strong at the open, it was not able to shake the selling pressure from the recent consolidation.  The rising dollar may be seen as the driving force for the market’s recent movements.  But, it may also be simply funds being rotated during a consolidation phase.  VIX rose again today and closed above 24, but, should see some resistance at 25.  Both SPX and Nasdaq closed below their respective support levels and are testing the 20-day MAs.  As I said in the Market Forecast last night, "Some major sectors are barely hanging on to their support levels… So, be more careful in the new week."  If the 20-day MAs don’t hold, we’ll be looking to play the downside this week.

Good night and HappyTrading! ™

"For the new week, we could see some major advancements in the market by the week’s end.  The important thing is for the market to keep above SPX 1080 and Nasdaq 2150, while letting off some steam.  Techs will see a lot of important earnings:  AAPL (Monday), YHOO (Tuesday), EBAY (Wednesday), AMZN (Thursday), and MSFT (Friday).  Miners were relatively quiet last week and could be the ones to take the market higher.  Financials saw profit-taking and got dragged down by BAC and GE at the end of the week; this sector will need to see some good earnings in the new week to help the market.  If the market breaks above SPX 1100, it will have some room to run."

While the earnings from techs were mostly good (AAPL, YHOO, AMZN, and MSFT all reported well and traded higher.  AMZN went up more than +26% on Friday!!), the market was very cautious.  It tested SPX 1100 a couple of times, but, was not able to break it.  Then, it tested the support levels a couple of times and was not able to break them either.  Both SPX and Nasdaq ended right at the above-mentioned support levels.  On Monday, commodities took the lead and push the market to test SPX 1100.  After the market, AAPL reported stellar earnings.  On Tuesday, AAPL jumped, but the rest of the market didn’t.  After the market, YHOO gave a good report card.  On Wednesday, the market tried attacking SPX 1100 again, but, ended down to test the support levels, instead!  On Thursday, the market bounced off of the support levels and returned to positive territory for the week.  After the market AMZN blew the top off of its earnings estimates.  On Friday, AMZN jumped to a new all-time high trading near $120/share; however, the rest of the market did not follow and finished at the support levels.

Besides some big movements due to earnings, the market as a whole was trapped in a fast oscillating, and yet, very tight range.  VIX tested 20, and bounced to close above 22.  We didn’t do much trading, but, took some profits off the table:

October 23, 2009
01:01 | HappyTrading MA ($230.40) Sold to Close MALKF Nov 230 calls, at $9.80 +15%
12:56 | HappyTrading GOOG ($554.00) Sold to Close GOPKN Nov 570 calls, at $7.00 +12%
11:50 | HappyTrading GOOG ($555.50) Sold to Close GOPKN Nov 570 calls, at $7.20 +15%
08:52 | HappyTrading MA ($230.90) Sold to Close MALKF Nov 230 calls, at $10.00 +18%

October 21, 2009
07:14 | HappyTrading GOOG ($557.75) Sold to Close GOPKN Nov 570 calls, at $8.00 +28%

As I said on Wednesday, "be more careful and there’s no hurry chasing trades.  I think it’s prudent to keep a health cash position until things are clearer."

Oil charged up to a new yearly high, trading above $80/barrel; still no help to energy stocks last week.  Gold treaded water and fluctuated in a tight range.  For the week, the market was basically flat, with the Dow down 23.72 points, SPX losing 8.08 points, and Nasdaq sliding 2.33 points.  At the time of this writing, Asian markets were mostly higher to start the week.  Let’s see how the US market looks after Friday’s close:

SPX

On Friday, SPX fell 13.31 points to close at 1079.6.  It closed just below the 1080 level.  The MACD went down.

Nasdaq

Nasdaq dropped 10.82 poinst to close at 2154.47.  It closed just above the 2150 level.  Its MACD slipped well.

The market’s reluctance to break above SPX 1100 demontrated some fatigue.  At the same time, buyers came in to maintain the support levels (SPX 1080 and Nasdaq 2150).  Remember, these support levels were the resistance levels back in September!  If you study the charts above carefully, you’ll see that, essentially, after the market broke through these levels on October 14, it has not really gone anywhere!  It’s been consolidating for the past 8 trading sessions.  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 10/26/09.