January 6, 2008- Market Summary
Even though we've only just begun a new year, the market has
definitely given us a lot of things to talk about. So far,
we've seen the price of gold and oil move to record highs,
which by itself would normally be plenty of news for the markets
to digest. But with the combination of soaring gold and oil
prices and Friday's slower-than-expected job growth report,
it isn't difficult to see why the Dow is off to its worst
start since 1983.
The chart of specific interest this week is the Russell because
it has fallen below the support of the 735 level. This index
is substantially below its 100/200-day moving averages and
looks like it is leading the major indexes lower. Another
chart of interest is of the Dow because we noticed that the
50-day moving average has recently crossed below the 200-day
moving average. This bearish crossover is generally used by
traders to signal a shift in the prolonged uptrend. These
moving averages have not triggered a sell signal since the
market was moving sideways in early 2005.
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