"No man can become rich without himself enriching others"
Andrew Carnegie



Friday, June 14, 2013

Stock Market Rally in an Intermediate Downtrend

NASDAQ Panelists
 (Photo credit: Think London - )
However, bearish resistance that began forming with the May 22 highs is troublesome


The advance was attributed to better-than-expected economic data. Retail sales for May rose 0.6%, and initial jobless claims fell to 334,000.
At Thursday’s close, the Dow Jones Industrial Average was up 181 points at 15,176, the S&P 500 rose 24 points to 1,636, and the Nasdaq jumped 45 points to 3,445. The NYSE traded 755 million shares and the Nasdaq crossed 376 million. Advancers led decliners on the Big Board by 4.6-to-1 and advancers were ahead on the Nasdaq by 3.1-to-1.

Chart Key
Along with the other major indices, the Nasdaq’s rally on Thursday reversed the short-term downtrend that began on Monday. The significant support at the gap at 3,305 to 3,370 held firm, as well as its 50-day moving average at 3,369.
And, as a sign of bullish strength, the index flashed its second Collins-Bollinger Reversal (CBR) buy of the week. However, the bearish resistance line that has tracked the intraday high since the May 22 high has been powerful enough to thwart every rally attempt since then.
Conclusion: So far every major index has held firm in the face of significant selling. But on Thursday, the market reacted favorably to good news — exactly what we would expect of a bull market.
Unless the support at S&P 1,597, Nasdaq 3,370 and Dow 14,887 are violated, the intermediate and long-term trends are still bullish. But the short-term bearish resistance that has been marked by the high of each day on each major index since the May 22 high is troublesome. Until it is penetrated it is best to be cautiously bullish....
Enhanced by Zemanta