This weekend, in my Market Forecast, I said,
“The market is fighting to make this recovery stick. Nasdaq tested its daily upper BB last week and its 10-day MA has gone above the 30-day MA. The 20-day MA has turned up. SPX, on the other hand, is seeing the 10-day MA above the 20-day MA, but, was held under the 30-day MA. What the market needs now is a solid jump, a big GREEN day, to catch the daily upper BB to allow the market to continue higher. For the new week, we have the Fed meeting on Tuesday. I think the Fed will likely leave the rates unchanged. The financial markets are a bit too nervous right now for the Fed to make any changes. If the Fed leaves the rates unchanged, I think the market will likely rally.”

The Fed came out with its decision today and left the rates unchanged, and, indeed, the market rallied to render the “big GREEN day”. Commodity-related sectors continued to fall, and the crude went below $120/barrel! Financials and the techs, on the other hand, had a very strong day. Techs were led by: GOOG +3.64%; AAPL +4.84%; RIMM +4.77%; AMZN +4.49% (we started a new position in this today). Among the financials: JPM +4.36%, FNM +14.96%, PRU +5.36%, WB +11.4% were some of the top gainers.

After the market, CSCO beat the estimates on its earnings and sent its stock soaring more than +7% in AH trading. PCLN reported a quarterly profit that rose +56%, but, did not seem to please the investors. PCLN shares tumbled more than 15% after the report.

The Dow was up +331.62 points; SPX jumped +35.87 points; Nasdaq gained +64.27 points:

VIX fell 10% to close at 21.14, below 22! INX2 (Internet), SOX (semiconductors), BTK (biotechs), SWH (software) all recorded solid gains. XLF (finacials) added +5.08%. Commodity-related sectors continued their slide: USO (oil) -1.98%; GLD (gold) -2.34%; XME -0.91%. FXI (Chinese ADRs) gained +1.92%.

SPX

SPX jumped +35.87 points to close at 1284.88. It closed above the 1280 level. Its MACD turned up again.

Nasdaq

Nasdaq added +64.27 points to close at 2349.83, just shy of the 2350. It almost caught up with its daily upper BB. The MACD went higher.

So, the market made the big jump that I was looking for. This jump has brought the major market indices back above their daily MAs and basically catching the daily upper BB. I think the market has drawn the bottom. Tomorrow, we may see the market wobble a bit after today’s big gains. If the market can hold these levels with modest gains, it would be a good accomplishment tomorrow. The market may need to breathe a bit before continuing higher. VIX has fallen below 22; this is very good for the market. Commodity-related sectors have more room to fall, but, may see some bounces tomorrow. XLE (energy) bounced up a little today, but does have more room to go lower. The solar sector seems to be feeling pressure from the energy sector, instead of going higher with the techs. If the solars wake up, they should provide the techs another boost.

Good night and HappyTrading! ™