The Weekly Report for August 25th - August 29th, 2008

August 24, 2008- Market Summary
It was a week of mixed results as market participants tried to discern the future direction of the broad market indexes. Many traders are attributing the market's indecision to nearby resistance levels. These levels of resistance, which are shown on the charts below, are causing many traders to question whether bullish rallies will be able to sustain a longer-term move higher. The chart of specific interest this week is of the Russell 2000 because it bounced off the identified resistance level and it is now trading near the support of the consolidation pattern that we mentioned in our previous report.

Last week, we also mentioned that the Nasdaq broke out of a period of consolidation (shown by the converging trendlines). As you can see from the chart, the momentum that was sparked after the rally faced resistance as the index neared the 1,995 level. It is important to note that the 50-day moving average remains below the 200-day moving average, so traders may want to wait on the sidelines in this market until confirmation of a longer-term reversal appears.

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.