The Weekly Report for December 8th - December 12th, 2008

December 7, 2008- Market Summary
In our last few report, we've mentioned that the markets are in an interesting position from a technical analysis standpoint. We noted that the major indexes, such as the S&P 500, reached their lowest levels since 1997. This past week, things began to turn around as the major indexes started to consolidate. As you can see from the charts below, trading ranges have started to settle down. However, they are still quite volatile relative to historical averages. The recent buying strength has many traders worried about a potential pullback, while others are taking the strength as a sign of a market bottom. We think that the high level of volatility that has been present in the markets, combined with weakening fundamental and economic data, makes it extremely dangerous for anyone to predict how long buying pressure will last. The safest bet is to remain on the sidelines.

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