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Last weekend, in my Market Forecast, I said,
“So, for the new week, we should be looking at how the market reacts to the “rescue plan” for the automakers when the details are finally agreed on. It does seem that the market is more ready to break above the 30-day MA this time. The 30-day MA has flattened out and the 10-day MA has turned up. VIX closed just under 60, and, looks ready to come down more.”
Well, the debate and political manuevers around the auto “rescue plan” were more than a circus act this week. While the House passed the bill easily, the Senate did not allow it to go through. The market cleared above the 30-day MA early in the week; but, by the end the week, the market barely hung on to it. VIX did go lower and closed slightly below 55. The Dow finished the week down 5.74 points; SPX added +3.66 points; Nasdaq gained +31.42 points. So, the market overall was pretty much flat, but, techs showed a little more strength. Surprsingly, Nasdaq made most of its gains on Friday, after the auto resuce bill was defeated in the Senate and hope shifted towards the White House. Let’s see where the market stands:
SPX
SPX added +6.15 points to close at 879.73. It closed at its 30-day MA. The MACD was higher slightly.
Nasdaq
Nasdaq gained +32.84 points to close at 1540.72. It closed just above the 30-day MA. The MACD went up.
Well, next week should be full of actions. First of all, the “audience” is holding on to its breathe, waiting for the plot on the “auto rescue” drama to unfold. Then, the Fed gets to decide where to take the interest rate to next. Further, it is another options expiration week,…
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