The Weekly Report for October 8th - October 12th, 2007

October 7, 2007- Market Summary
The major markets rallied higher last week thanks to Friday's solid employment figures. As you can see from the charts below, Friday's announcement calmed investors' fears of a potential recession and has sent the Dow and S&P into record territory again. In our last report, we mentioned that traders would likely keep a close eye on the Nasdaq because it has been leading the run higher. This chart will continue to be of specific interest, but this time for a different reason. The Relative Strength Index (attached to the bottom of the chart) is nearing overbought levels, which suggests that the bulls may start to lose their conviction. We'll watch to see how the major indexes respond to the upcoming earnings releases over the next couple of weeks because these announcements may act as a barrier to further moves higher.

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