This past week the Market started out moving up as we had expected but the move was short lived. On Tuesday it gave up Mondays gains and failed to provide us with the technical confirmation we were looking for. The Market tested the high once more on Wednesday but was unable to hold and closed near the lows of the day. The Markets have now been in this trading range for about 5 weeks. We did see a big spike of volume on Friday but very little price movement. The volume surge was due to Options expiration and end of year window dressing.
The charts are not offering any clues as to when we may get out of this range. The volume should drop off significantly over the next two weeks with the markets closed early this Thursday and then Friday in observance of Christmas and again the following week early closing Thursday and then Friday for New Years. The market tends to float up for the last two weeks of the year due to the low volume as most institutional traders are gone on winter vacations leaving only the smaller retail traders to guard the store. Human beings in general are optimistic and bullish giving us the famous Santa Claus rally.
Based on the quick rise in the US dollar we believe it is now overbought and should move back down giving gold, oil and the stock market a little help with the move up over the next two weeks.
The Nasdaq Composite Index
First support is unchanged from last week at - 2176, 2140, 2135 and 2050. Resistance is at 2214 and 2250.
Standard and Poors SP-500 index
First support is unchanged from last week at - 1095, 1084 and 1077. Resistance is at 1121 and 1200..
The Dow Jones Industrial Averages Index
Support is at - 10230, 9930 and 9800. Resistance is at 10517.
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The KBW Bank Index
Bounced on support is at - 41.70 resistance is at 43.00, 44.50 and 45.50
GOLD - via the GLD
Gold did hit a temporary top the previous week as we mentioned here last week. It also broke below the 112 and 110 support areas, next support will be at 107.85 and 106. Resistance is at 114.
OIL (light sweet crude)
Oil continued to move down with the dollars move up and it broke support. It has more room to the down maybe as much as 5% - 6%. But all depends on the dollar.
The US Dollar (Dollar Index ) The U.S. Dollar broke above resistance and has more room to run, but like every thing else nothing goes straight up. Our current target is in the 77.60 area.
This past week the Market started out moving up as we had expected but the move was short lived. On Tuesday it gave up Mondays gains and failed to provide us with the technical confirmation we were looking for. The Market tested the high once more on Wednesday but was unable to hold and closed near the lows of the day. The Markets have now been in this trading range for about 5 weeks. We did see a big spike of volume on Friday but very little price movement. The volume surge was due to Options expiration and end of year window dressing.
