December 17. 2007 - Market Recap

Wanted to focus on the S&P 500 and the Nasdaq today. Notice how the December 4th low was broken today the only thing stopping this from continuing down is the low the last week in November. Since this is options week we will see if some pinning starts to occur. The SVAPO is heading back to oversold, and then we should see a trun in the MA(Open) and the MA(Close) switch positions and start back up. At that point it may be appropriate to initiate some trades. This chart with the Nasdaq is interesting because we are getting close to the Novemver low and the next resistance will be the August low, which I put at 2460 if you look at a longer based trendline. The other item to note is that presently for this down trend we are not seeing the volume that we had in the past. I added a 50 day moving average on the volume graph. Notice the other drops had large volume. We are not experiencing that so far so this may be the last downtrend for awhile. People may be looking at there portfolios and worried about the tax implication. We may have to wait till January for a continued down trend.

The next graph is the % of stocks on the Nasdaq above their 50 day moving average. Notice it is not quite as low now as what it was in September but we are getting close. The item of more interest is the % of stocks on the Nasdaq above their 200 day moving average. The bears have been in control for a while, and I expect them to stay there for a while. Once the 200 day broadens then will be a good entrance criteria for going long.