The Weekly Report For January 26th - January 30th, 2008

January 25, 2008- Market Summary
Selling pressure continued to dominate the direction of the indexes this week, as many results were not as stellar as investors had hoped. Announcements have been mixed so far; companies such as Apple (Nasdaq:AAPL) and Google (Nasdaq:GOOG) released positive numbers, while the numbers from bellwethers such as Microsoft (Nasdaq:MSFT) and General Electric (NYSE:GE) left investors wanting more. Traders are still not seeing a catalyst that will drive prices higher and, as a result, the downward pressure is likely to continue.

As we noted in our previous report, the failed move above resistance levels shown in the charts below continues to lessen the chance of a bullish rally. The question remains whether we are going to see the major indexes retest their November lows. We expect that many active traders will choose to wait on the sidelines until the volatility associated with earnings season tapers off. Lastly, active traders will likely pay close attention to the Nasdaq because it it still struggling to overcome several key resistance levels. Notice how the index has been unable to close above its 50-day moving average since it broke below the wedge formation. This barrier will likely cause the index to head lower from here.

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