Let's pan put to the NYSE weekly chart. As you can see, we have fallen out of the 2003 bull market trendline support and closed below it for two weeks in a row. This is a bearish development, although the week printed a doji, a sign of uncertainty. Nevertheless, keep an eye on the 50 week moving average (brown line), now at 7913. We have had six weeks out of seven bouncing and closing above that moving average, so it is shaping up to be a key test for the overall rebounding capabilities of the stock market. We had pretty much the same pattern in August 2004, but the major difference back then was that it happened above the 2003 trendline. Things are very different now as the market is clearly leaning over the precipice.
This entry was posted
on Sunday, July 23, 2006 at 10:28 AM.
