The market bounced today after opening lower. Two weeks ago, on 1/22/08, I said,

HappyTrading
Posted January 22, 2008 at 12:21 pm | Permalink (Edit)
market
I’m cautiously “more” optimistic. If this is indeed establishing the bottom, then, we haven’t seen the real bounce yet. The initial bounce will need to take SPX to 1375-1410 (the 2 resistance levels above 1320). Then, we’d probably need a test of some sort before calling the bounce “real”.

We saw the initial bounce last week to about 1395, between 1375-1410.

On 1/30/08, I said of SPX,

“If it penetrates below the 10-day MA, it is more likely to be on its way to test the lows, which would probably find support in the 1300-1320 region.”

SPX dropped below its 10-day MA on Monday, and it went as low as 1316.75 today; then, it bounced back.

This could be a very good double-bottom test, if the market can continue up from here. The U.S. Senate passed the economic stimulus plan today, announced after the market clsoe, that would give rebates of up to $600 for individuals or $1,200 for couples plus $300 for each child. This could provide some additional, positive momentum to the market tomorrow.

The Dow closed up +46.90 points; SPX added +10.46 points; and Nasdaq gained +14.28 points.

Here’s how the market closed:

INX2 (Internet), SOX (semiconductors), and BTK (biotechs) was able to make slight gaines. UNG (natural gas) jumped +2.41%. GLD (gold) went up, while GDX (gold miners) stayed flat. PBW (clean energy) added +1.49%. XME (metals and mining) was solid with a +1.94% advance. FXI (Chinese ADRs) recovered almost +4%.

SPX

SPX added +10.46 points to close at 1336.91. It tested the 1300-1320 region and closed above the 1325 support level. Certainly encouraging.