04/17/2011 Weekend Update & Outlook - Markets Visit Their Moving Averages

Dow           -0.31%

S&P            -0.64%

Nasdaq     -0.59%

Russell     -0.71%

Market waffled this week, pressured by selling, pulling back to their respective 20 & 50 Day Moving Averages.  The Nasdaq (technology) was hit the hardest of the 3 major indexes this week due in part to disappointing earnings from Google (GOOG).

 

So far, earnings season has been mixed.  Alcoa (AA) and Bank of America (BAC) released weaker than expected earnings.  Conversely, JP Morgan (JPM) roasted their estimates beating by 67% due to lower than expected credit card losses and a stronger consumer business.

 

Crude oil softened through the week taking a breather from it's nosebleed run.  Treasuries and Gold were safe harbors as inflation fears amplify.

   

Areas of support remain at S&P 1303, 1292, 1280 and 1250.  Resistance remains at S&P 1330, 1345, 1350 and 1400.

      

Subscribers allowed expiration of an IWM Iron Condor and a SPY Call Credit Spread this week yielding 12.99% and 7.53%, respectively.

 

Taking advantage of this week's weakness, two new Put Credit Spreads using May options were also opened.  Both spreads received juicy premiums and are placed far OTM (Out of The Money).  Calls will be added to create Iron Condors once the strength, or lack of, the market is better understood.

 

The market is an important position right now as it has pulled back to its Moving Averages and strong chart support.  Is this minor pullback like every other recent one which leads to new highs shortly thereafter?  Or, is there more weakness to come?  Personally, I would like to see a move back to S&P 1280 before resuming the rally as that would be the healthiest scenario.  However, I am unsure if that will happen as we may re-visit the 1345 highs sooner than later.

 

Stay tuned......happy trading......and thank you to everyone for supporting BookingAlpha!