The Weekly Report For March 16th - March 20th, 2009

March 15, 2009- Market Summary
Major indexes staged an impressive rally last week thanks in part to easing concerns about the financial sector. Recent buying pressure marked the best week in the markets since November, and has also triggered a debate over whether the bottom in the market has formed. From a technical perspective, it is important to note that each of the major indexes has notched a series of lower highs and lower lows, which is the definition of a downtrend. For more, see Market Bottom: Are We There Yet?

It is still too early to determine whether the bulls will be able to continue to send prices higher and it could prove to be foolish to bet against the underlying downtrend. Active traders ought to remain patient and only bet on a reversal once a series of higher highs and higher lows has established itself. As you can see on the charts of the major indexes, the S&P and the Dow closed the week near their respective 50-day moving averages (red lines). This is technically significant because it is possible that traders will look to take their profits around these levels, which may trigger another wave of selling pressure. For further reading, see Moving Average Bounce

Join me (CaseyMurphy) in Investopedia's FREE Stock Picking Community. Check out what other traders are watching and post your own takes on where you think your favorite stocks are headed. Click here to learn more!

Have a Great Day! Casey Murphy Senior Analyst, ChartAdvisor.com DISCLAIMER ChartAdvisor is not a registered Investment Adviser or a Broker/Dealer. The trading of securities may not be suitable for all potential users of the Service. You should be aware of the risks inherent in the stock market. Past performance does not guarantee or imply future success. You cannot assume that profits or gains will be realized. The purchase of securities discussed by the Service may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities, or making any investment decisions. You assume the entire cost and risk of any investing and/or trading you choose to undertake.