Last weekend, in my Market Forecast, we discussed:

"For the new week, Friday's afternoon selloff negated a breakout. It looks like markets are still consolidating. The support levels may need to be tested again: SPX 1980 and Nasdaq 4500."

Well, thing pretty much happened as discussed.  On Monday and Tuesday, the market slipped.  On Wednesday, as soon as SPX and Nasdaq tested their respective support levels, buyers came in.  The buying pushed SPX to almost 2000.  But, Thursday brought renewed selling pressure, and SPX closed below 1970!  Buyers came in again on Friday, driving SPX above 1908 and Nasdaq above 4500 for the close.

We took profits on the downside.  All of our closed trades were in the positive, although we closed some of the puts a bit early:

• 11:50 | HappyTrading VIX ($16.00) Sold to Close 10C13 Oct 13 calls, at $2.85 +30%
• 06:39 | HappyTrading GOOG ($585.00) Sold to Close 0926P590 Sep 590 put, at $7.00 +35%
• 11:59 | HappyTrading CAT ($101.00) Sold to Close 10P105 Oct 105 put, at $5.00 +22%
• 07:33 | HappyTrading GOOG ($588.00) Bought to Open 0926P590 Sep 590 put, at $5.20
• 07:00 | Ecstatic Plays TSLA ($254.20) Sold to Close 0926P260 Sep 260 put, at $7.70 +24%
• 06:39 | Ecstatic Plays SCTY ($63.00) Sold to Close 0926P65 Sep 65 put, at $2.70 +36%

For the week, the Dow was down 166.59 points; SPX lost 27.55 points; Nasdaq dropped 67.6 points.  Gold was basically flat, while oil bounced a bit to close near $93/barrel.  At the time of this writing, Asian markets were mixed, with Hong Kong down almost 2% on democracy protests against China's voting policy for Hong Kong's chief executive.  Let's see how the US markets looked after Friday's close:

SPX

On Friday, SPX added +16.86 points to close at 1982.85.  It closed above 1908.  The daily MAs were flat.  The MACD slid.

Nasdaq

Nasdaq popped +45.45 points to close at 4512.19, above the 4500 mark.  Its daily MAs and MACD slipped.

US markets got a good bounce on Friday, leaving both SPX and Nasdaq above their respective support levels.  For the new week, I think the markets will be volatile again.  Although we saw a solid bounce on Friday, both SPX and Nasdaq closed below their respective daily MAs (The Dow looks a bit stronger, closing above its 20-day MA).  If SPX and Nasdaq fall below the support levels again, I don't think they will hold this time.  Below 1980, SPX has support around 1950, while for Nasdaq, below 4500, it has support between 4400 and 4350.  Gold is desperately trying establish a support.  Internet and semiconductor stocks are trying to hold supports.

Sector Watch

GLD (gold)

GLD is shuffling above and below $117.  The MA curves are very steep now, while the MACD has turned up.  I think we will see some volatile trading in GLD.  Let's see if $117 holds.

FDN (internet)

FDN closed below its daily MAs.  $60 is a support, below which between $59 and $58 has support.  LNKD got an upgrade on Friday.  GOOG is trying to hold.  YELP and NFLX are slipping.  FB, TWTR, and EXPE still look healthy.

SOXX (semiconductor)

SOXX is still healthy, closing above its 30-day MA.  MU popped on Friday on earnings.  BRCM and ALTR are both healthy.  INTC looks a bit weak.

OIH (oil services)

OIH fell below $51.  Its next support lies between $50 and $49.  We might see some bounces in this sector.  RIG, NOV, and SLB all seem to be looking to climb a bit.

Good night and HappyTrading! ™