Weekly Wrap + Market Forecast + Sector Watch: SPX, Nasdaq, GLD, USO, XLF, INX2

Last weekend, in my Market Forecast, I wrote:

"For the new week, the market will start with a more bullish stance.  The daily MAs on both SPX and Nasdaq have turned higher.  Nasdaq is already seeing the hint of a new bullish crossover in the MACD.  VIX managed to close just above 21; but, breaking below 21 could send it to test 20 again.  Semiconductors have been basically "dormant" since 2002 when energy stocks took over as the leaders on the market.  We could be seeing the changing of the "leader baton" back to the techs, which will ride heavily on the semiconductors.  We’ll still need to see financials wake up from its recent slumber, though.  If the market can close above SPX 1120 and Nasdaq 2200, it should start a new leg up."

Semiconductors were strong to start the week.  But, the financials stayed flat.  The market basically didn’t go anywhere.  Nasdaq tested the 2200 a couple of times, but, was not able to close above it.  On Monday, solars and fertilizers pushed higher.  On Tuesday, gold continued to slump and dragged commodity-related sectors lower.  On Wednesday, commodity sectors bounced and the market was able to finish in the green.  On Thursday and Friday, the market clawed back the grounds that it had lost on Tuesday and finished the week basically flat. 

We took things easy last week and traded lightly as the market was treading water.  Here were the closed trades:
December 11, 2009
08:43 | HappyTrading CLF ($43.30) Sold to Close CGJAC Jan 42 calls, at $3.40 +10%
08:26 | HappyTrading AAPL ($194.44) Sold to Close APVAT Jan 200 calls, at $5.30 +6%
07:47 | HappyTrading CLF ($43.80) Sold to Close CGJAC Jan 42 calls, at $3.70 +19%

December 09, 2009
01:00 | HappyTrading AAPL ($198.10) Sold to Close APVAT Jan 200 calls, at $7.50 +50%
12:19 | HappyTrading AAPL ($196.20) Sold to Close APVAT Jan 200 calls, at $6.60 +32%
06:55 | HappyTrading GS ($162.25) Sold to Close GPYXL Dec 160 puts, at $2.17 -10%

December 08, 2009
07:54 | HappyTrading SHLD ($70.90) Sold to Close KTQLN Dec 70 calls, at $2.30 -59%

We caught a quick trade on AAPL as it bounced.  CLF was another quick trade.  We cashed these out before the weekend as the dollar was strong.  This weekend, S&P reported that it will add CLF into the SP 500 Index as of 12/18.  So, we’ll be keeping an eye on CLF!

For the week, the Dow added +82.6 points; SPX added +0.43 points; Nasdaq slid 4.04 points.  Both oil and gold suffered substantial pullbacks.  Gold traded below $1120/ounce (off $100/ounce from the recent high) and oil finished below $69/barrel!  At the time of this writing, Asian markets were mixed with the Taiwanese market trying to break higher.  Gold was having a slight bounce.  Let’s see how the US market looks after Friday’s close:

SPX

On Friday, SPX added +4.06 points to close at 1106.41.  It closed above its daily MAs.  The MACD turned up.

Nasdaq

Nasdaq slid 0.55 points to close at 2109.31.  Its daily MAs went higher although the MACD was flat.

Both SPX and Nasdaq managed to close above their respective daily MAs.  Nasdaq is showing a new bullish formation in its daily MAs.  VIX closed, once again, below 22.  For the new week…

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