Weekly Wrap-Up + Market Forecast + Sector Watch: SPX, Nasdaq, XLE, TLT, FAS, IGV

Last week, as expected, the market started on a weak note on Monday, But, buyers soon returned, leading up to a rally on Thursday, after the Fed told investors not to place too much importance on the initial interest hike, as rates are likely to remain low. But, on Friday, some fear returned, as investors shifted their focus back to Greece.

We had another nice week, with quite a few nice trades. As shown in my article on Wednesday night, my Ecstatic Plays portfolio's value pushed higher again! We started the week cashing in on VIX calls (+85.5%) when the market dropped on Monday. Then, we locked in gains on AET calls (+63.9%), as UNH made a buyout offer. I talked quite a bit about MBLY and we scored as high as +53% on MBLY calls on Wednesday. BA calls did well for us with profits as high as +54.6%. Here are the closed trades for the week:

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Tonight, the big news is that Greece seemingly has come to some senses and made a proposal that EU leaders think they can use as basis to make progress. Back in the US healthcare industry, M&A frenzy continues. ANTM has made a $47 billion bid for CI, which Cigna has rejected. On the other hand, AET has reported made an offer to acquire HUM, while AET itself is being pursued by UNH. This 5-way "love affair" is starting to get messy. Besides AET, I think the other four could all go higher!

For the week, the Dow was up +117.11 points; SPX added +15.88 points; Nasdaq gained +65.9 points. At the time of this writing, Asian markets were mostly up. Gold made a big bounce to $1200/ounce, while oil (WTI) as slightly lower, trading just below $60/barrel. Let's see where the US markets stood after Friday's close:


On Friday, SPX fell 11.25 points to close at 2109.99. It closed above its daily MAs. The MACD has turned up.


Nasdaq dropped 15.95 points to close at 5117. Its MACD went up slightly.

Both SPX and Nasdaq now look healthy, thanks to Thursday's big pop. But, both are still within the trading range, even though Nasdaq has made a new all-time high. It is still unclear whether there will be a follow-through to that breakout attempt. For the new week, Greek issues are still on deck. If a deal is made and Greece is able to avoid a default while staying with EU, markets will rally. If not, markets may falter again.

SPX needs to break above 2130 for a breakout, which may be a tall order. On the downside, 2090 is an immediate support; then, solid support exits between 2080-2070. Nasdaq, on the other hand, can push higher above 5120, if the breakout gets any follow-through. It has support down to 5070.

Financials are still looking health. But, energies fell weak again! Software still seems strong even though ORCL missed its earnings estimates.

Sector Watch

FAS (financials)

FAS was heading for a breakout on Thursday, but, the drop on Friday brought it right back to its trading range. Big banks all showed similar developments. BAC is looking a bit weak. PNC and STI pulled back.

XLE (energy)

XLE took a big drop on Friday to a new two-month low! SLB fell below its daily MAs. APC, EOG, and APA all fell back. OXY is holding up surprisingly well.

IGV (software)

IGV was heading for a breakout, until Friday. But, surprisingly, even with ORCL's earnings miss, the group is holding up! Its MACD has turned higher (bullish). This could be partially because online security software is being chased. CYBR, FEYE, and FTNT have all acted strongly. What happens when the chasing is over. If the broader market turns weak, we are going to see some quick exits out of these!

TLT (bonds)

TLT made some interesting moves last week. The MACD is now bullish. This could be setting up for a breakout. Now that we know, rates are going higher, but, perhaps not as much as (and/or as early) as people had thought. TLT could see a pop. We'll keep an eye on this next week.

I think it's going to be one of those "news-driven" weeks. First of all, any news out of Greece is going to be closely watched. Any concrete new development could drive the markets. M&A news are still coming out in many sectors. So, let's keep our eyes open and ears tuned in! Hope to see you in the chatroom!

Good night and HappyTrading! ™

Posted to Ecstatic Plays on Jun 22, 2015 — 1:06 AM
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