The Weekly Report for June 11th - June 15th, 2007

1) MARKET SUMMARY
2) INDEX CHARTS (DJIA, S&P, NASDAQ and RUSSELL)

Market Summary
In our previous report, we talked about how it was a good time for investors to be cautious of a pullback. We noted that the Relative Strength Index has been trading in the opposite direction of the price, which is a common signal of weakness within a trend. As you can see from the charts below, the bears took control of the momentum last week and, as a result, they sent the major indexes down toward the support of their respective 50-day moving average. It is not uncommon to see a sharp correction of approximately 2-5% after an extensive rally because there is not enough demand to offset the amount of selling pressure created from those looking to lock in a profit.

The chart of the S&P continues to be of particular interest because it bounced off the resistance near the 1550 level. It is important to note that the long-term trend seen on all the major indexes remains in the upward direction and many traders will continue to be very interested in whether the nearby 50-day moving average will provide enough support to prevent the uptrend from reversing.