Solars Shine! SPX, Nasdaq, SOLF, FSLR, SPWR, STP

The GDP came in at 0.6, which matched the estimates. The market futures initially jumped when the GDP report came out, but, MER and UBS received lowered earnings outlook and soon started to put pressure on the financial sector. This weekend, in my Market Forecast, I said,

“The market has been under pressure for recent months that started with the financials. Now that the financials are making a strong comeback, they could be the leading indicators to watch.”

The financials have been weak for the past two days, and the market has been having problems to move forward. The Dow was down 120.40 points; SPX lost 15.37 points; and Nasdaq fell 43.53 points.

Here’s how the market closed:

Most sectors closed in the red. USO (oil) gained another +1.08% INX2 (Internet) lost 2.41%. SWH (software) was particularly weak, down 3.63%, following ORCL’s disappointing earnings report. XLF (financials) fell 1.56%. MOO (agriculture) jumped +2.21%. FXI (Chinese ADRs) closed in the green, advancing +0.88%.

SPX

SPX lost 15.37 points to close at 1325.76. It closed below the 1340 level. The 10-day MA, however, has moved above the 20-day MA. The MACD flattened.

Nasdaq

Nasdaq fell 43.53 points to close at 2280.83. It closed below the 2300 level. Its 10-day MA is now above the 20-day MA. The MACD rose slightly.

The financials are weighing on the market again. However, the MAs have started to cross. The daily BBs are narrowing in making the upper BB closer to catch. But, we’ll need to see some strength in the financial sector.

This morning, SOLF reported excellent earnings and saw its shares rocketed up +16.58%! Most other solar plays traded higher today. FSLR traded above $233 intraday, but, closed at $227.49. SPWR jumped to almost $78/share, but, closed at $73.21. I closed my SPWR Apr 75 calls at $6 for a +33% gain. Those options traded as high as $6.8, but, closed at $4.7. STP went to almost $40/share, but, closed at $38.07. I just started a new position in STP with May 40 calls, at $4; these closed at $3.4. This sector has “corrected” quite a bit in the recent months. I think it could have a lot more room to recover. In a more favorable market environment, these shares should have been much stronger. We’ll be keeping an eye on these.

Good night and HappyTrading! ™