This market has been pretty crazy! Monday's drop was pretty unreal! The Dow was briefly down over 1,000 points. This was after falling three days in a row the week before. SPX fell down to 1867 before bouncing.
But, as expected, buyers came in on Tuesday, although the gains did not hold. Wednesday was a different story. Buyers drove stocks back higher and the buying continued into Thursday. Friday was a flat day and the major indices eked out a gain for the week.
We had a very profitable week finding winners on both sides. On Monday, we cashed out a big winner in GOOG puts, with +301% profit. We then jumped into the up side with calls in NFLX, SCTY, and MBLY. NFLX calls gave us an overnight +68.7% gain! Here are the closed trades for the week:
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For the week, the Dow was up 183.26 points; SPX added +17.98 points; Nasdaq gained +122.28 points. Gold fell to around $1130/ounce. Oil (WTI) bounced strongly, to near $45/barrel. At the time of this writing, Asian markets were mostly lower. Here are how the US markets looked after Friday's close:
SPX
Nasdaq
Both SPX and Nasdaq came down sharply and bounced sharply. For the new week, the market starts at a neutral position as the market consolidated on Friday. But, stocks may slip as the buying momentum wanes. Before the sharp drop, people were looking for a pullback. The pullback was so sharp that it brought most sectors into the correction territory in just a few days! Thus, the sharp bounce is warranted. Now, that the bounce has taken out the downside overshoot, we may see stocks slip again.
One good thing about the sharp drop that we have seen, is that now we have some support to work with. The low-end support lies around 1880. Higher support is at between 1960 and 1940. On the upside, there is resistance at 2000.
In the new week, we have once again the latest jobs data to look forward to on Friday.
Sector Watch
FAS (financial)
FDN (internet)
XLE (energy)
XME (metals and mining)
Good night and HappyTrading! ™