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The market traded all over the place today. It was slightly up in the morning, then, sank into the red. In the last hour of trading, the market was able to come up to close in the green. Much of the attention was on the hearings regarding the proposed $25 billion bailout plan for the auto industry. The energy stocks saw some strength today: XOM +4.02%; APA +1.79%; HES +1.64%; OXY +3.45%. This morning HPQ announced better-than-expected 4Q outlook. HPQ shares jumped +14.49%. IBM benefitted from the HPQ news and went up +3.36%. RIMM was strong, again, after hitting below $40/share yesterday. RIMM added +11.86%.
The Dow was up +151.17 points; SPX added +8.37 points; Nasdaq gained +1.22 points:
XLE (energy) was +2.8% higher, while OIH (oil services) garnered +2.37%. Tech sectors were mostly weak, with SOXX (semiconductors) down 1.96%. XLF (financials) were again weak, losing 1.43%. XME (metals and mining) closed down 4.98%. FXI (Chinese ADRs) lost 3.27%.
SPX
SPX added +8.37 points to close at 859.12. It managed to close above the 850 level. The daily MAs went lower and the MACD was flat.
Nasdaq
Nasdaq gained +1.22 points to close at 1483.27. It closed below the 1500 level. The daily MAs and MACD went down.
Even though the market closed green, it is still in a very precarious position. The daily MAs have once again curved lower and started a new “bearish” formation (10 below 20 below the 30-day MA). Nasdaq closed below the 1500 level, while SPX barely managed to hold its support at above the 850 level. It looks like the market was trying to draw hope from this propsed $25 billion bailout package for the auto industry, and was able to rally in the last hour to close in the green. It seems very similar, to me, when the “hope” of the $700 billion rescue package was in question in Congress. The market traded much lower after the $700 billion rescue package was finally passed. Right now, the market is still showing weak technicals, even though we might see bounces here and there. The support levels (Nasdaq 1500; SPX 850) are in real jeopardy. Unless the market can rally above the 30-day MA, the near-term outlook is still on the bearish side.
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