The Weekly Report for September 1st - September 5th, 2008

August 31, 2008- Market Summary
Last week, we spoke of being in a period of indecision, as participants tried to discern the future direction of the market indexes, with nearby resistance levels seemingly causing many traders to question whether bullish rallies will be able to sustain a longer-term move higher. The chart of specific interest last week was of the Russell 2000 because it had bounced off the identified resistance level and it had begun trading near the support of a consolidation pattern mentioned in a previous report.

The chart of interest continues to by that of the Russell 2000 this week, as the support we spoke of in our last report held up, and the index has begun to trade higher again. The index should continue to trade higher until it reaches the influential level of resistance around the 765 level, previously set at the top of the head-and-shoulders pattern and the recent swing high. It is important to note that the 50-day moving average has touched the 200-day moving average, so traders may be hoping to see a cross, signaling a longer term reversal in the downward trend.

Charts of all four broad market indexes saw a bit of upside movement this week. The Nasdaq found a bottom in the near term, as prices bounced off of the 50-day moving average. The DJIA and S&P 500 both moved higher, closing well above their 50-day moving averages after breaking above a short-term consolidation patterns that had been forming over the past month.

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