Weekly Market Recap For 8/30/2015

Last week, the market started with a free fall on Monday when the SP500 went down by more than 5.3% and the Nasdaq 100 lost more than 9.7% within the first 5 minutes of trading. These drops are historic, but mild in comparison to previous market crashes on a percentage basis. Just as the market had dropped swiftly, it bounced back with similar speed. The SP500 launched a rally on Tuesday and gained more than 80 points before it sold off in the last hour of trading, and ended the session with a loss. On Wednesday, the SP500 made another attempt to recover some of its recent losses. This time the market was able to hold on to its gains. The SP500 closed on Wednesday with a 3.9% gain. On Thursday, a follow through rally ensued. The SP500 ended the session with another 47 points gain. By the close on Thursday, the SP500 not only regained the losses from Monday, it was positive for the week. Then on Friday, typical for weekly options expiration, the market just meandered and the SP500 closed with a small gain of 1.21 or 0.06%.

The SP500 ended the week with a weekly gain of 17.98 or 0.9%, with a close at 1988.87. So far, it has held the October support level at 1862.49 and has closed above the December resistance at 1972.56. In the coming days, it could fluctuate between 1948 and 1993 before it makes another move in either direction. If it decides to move down, then the 1862.49 support level could be retested. If it decides to move up, then the potential resistance is at 2040.24.

SPX

(click on the chart to enlarge)



The SPY ended on Friday with a 0.01 gain or 0.01% at 199.28. It could consolidate between 195 and 200 in the coming days before it makes its next move. The potential support level is at 181.92 and the potential resistance is at 204.40.

SPY




The Nasdaq 100 made a nice recovery from the 410 points drop on Monday. It ended the week with a weekly gain of 131.85 points or 3.1%. It could be range bound for a few days between 4207 and 4350 before it makes a move in either direction. The near term potential support remains to be the October level at 3765.28 and the potential resistance is at 4349.93.

NDX




The Russell 2000 closed at a new corrective low on Tuesday and made a new intraday low on Wednesday, and kept the bears on the lookout for opportunities to short the market. But to no avail, the Russell 2000 came off those lows and recouped Monday’s losses. It ended the week above the January resistance level with a modest weekly gain of 6.54 or 0.06% at 1162.91. The revised potential resistance is now at the price gap between 1200.74 and 1208.47, while the October level at 1049.30 remains to be the near term potential support.

RUT




The market behaves very similar to our emotional behavior. When we go from desperation to jubilation within a short period of time, there’s bound to be a period of calmness for our emotions to digest the big mood swing. After a week of huge price swings, the market could enter into a range bound trading pattern before it makes its next move. As with anything that has been through a shock, it will take time to heal. Until the technical for the market and the technical for the stocks have healed, one should remain patient and cautious.