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The market overcame afternoon weakness to close slightly higher. Energy and biotech stocks were strong: AMAG +3.21%; BIIB +2.44%; GENZ +2.23%; OXY +3.57%; HES +3.39%; RIG +2.93%. Financial stocks also bounced. This morning, I said in the Trading Room:
HappyTrading market
things will likely to be volatile the next couple of days as the market work through the intraday chart bottoms and figure out whether to bounce back or continue another leg down. I’m watching the overall market directions.
The market was very volatile today. It opened high and dropped lower, but, bounced back for a positive close at the end of the day. In addition, between the height and trough, there were plenty of noises, jumping from positive to negative within minutes! The Dow ended down 25.41 points; SPX added +1.53 points; Nasdaq gained +7.67 points:
XLF (financials) added +1.37%. BTK (biotechs) jumped +3.94%. Commodity sectors were strong: XME (metals and mining) +3.12%; OIH (oil services) +2.45%; XLE (energy) +2.5%; USO (oil) +3.88%; GDX (gold miners) +1.97%. FXI (Chinese ADRs) was lower by 1.11%.
SPX
SPX added +1.53 points to close at 871.79. Its daily MAs were flat and MACD was slightly lower.
Nasdaq
Nasdaq gained +7.67 points to close at 1546.46. It closed at its 30-day MA. The MACD flattened.
In this market, you really need to look at the technicals. From day to day, lots of trading are not based on the fundamentals much at all. And, it can drive you crazy looking for reasons. Charts should be used as additional tools to help you figure out where the market is heading. This weekend, I mentioned, “VIX has risen back above 40 and could test the resistance at 44-45 again.” VIX tested that resistance level (went as high as 47), but, came down to close below 44. As VIX came down, the market bounced. Both SPX and Nasdaq closed in the green. The market is now in a good position to push higher. We’ll need to see the market indices to rise above their daily MAs. Both financials and energy stocks bounced back today. These sectors will also be good indicators for the market strength.
Good night and HappyTrading! ™
