December 16, 2007- Market Summary
In our last few reports, we've mentioned that market
breadth may influence the short-term direction of the
major indexes. Interestingly, we've noticed an acceleration
in the number of issues trading near the lower ends of their
52-week ranges. On Friday, 7% of the issues that trade on
the NYSE
Composite Index created new lows (242 / 3,411). A large
number of companies trading near their 52-week lows is often
associated with a downward trending market.
One chart
of specific interest this week is of the Russell because it
bounced off the resistance of its 100-day moving average.
As you can see from the chart below, many traders will now
watch to see if the bears will send the index back toward
the support of the 735 level. The recent weakness in the markets
may be used by traders as a sign to be cautious and it wouldn't
be suprising to see many remain on the sidelines for a few
more weeks.
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