Last weekend, in my Market Forecast, I wrote:
"For the next week, the market starts in a neutral position with weakness in tech stocks. Financials held up quite well. Earnings season will start with AA and YUM reporting after the market on Tuesday, which could both give some insights into China’s economy. COST on Wednesday morning could show how strong the US consumers are. The big guns come on Friday morning with JPM and WFC, which could set the early tone for the financials in October. 1440 is now the support for SPX and 1470 is the resistance.
We have to be careful this week. If Nasdaq comes down below its daily MAs, we could see some selling pressure. Big names such as AAPL, GOOG, and AMZN all seem tired. Selling in these could pressure the broader market, as other sectors may follow."
Well, on Monday, Nasdaq closed below its daily MAs, although the broader market hung on, propped up by a bounce in coal stocks. AAPL gapped down on Monday and other techs slid. On Tuesday, the selling pressure finally spread to other sectors and the broader market came down to test 1440. That evening, CMI gave its earnings warning. The following morning on Wednesday, CVX warned, and the market fell below 1440. Wouldn’t you know it, the market attempted a bounce off of 1440 on Thursday morning, only to relinquish the gains before the close. JPM and WFC’s earnings did not inspire the buyers on Friday, and the market slid lower.
We had a mixed week and closed some of our puts too early:
For the week, the Dow was down 281.3 points; SPX fell 32.34 points; Nasdaq dropped 92.08 points. Oil actually recovered a bit last week, staying above $91/barrel. Gold, however, pulled back. At the time of this writing, Asian markets were mostly lower. Let’s take a look to see where the US markets stood after the close on Friday:
SPX slipped 4.25 points to close at 1428.59. Its daily MAs and MACD sled.
Nasdaq fell 5.3 points to close at 3044.11. Its daily MAs and MACD also went lower.
Both SPX and Nasdaq fell below their respective daily MAs. VIX bounced to close above 16. For the new week…
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