The Market Bounced Back

The market closed the week with a gain after a few days of triple digits loss for the DJIA. On Thursday when the SP500 came down to the widely watched support level near 1598, it behaves like clockwork and bounced of this support level. The market continues to move higher on Friday and closed the week with a gain near the high of the day at 1643.38. Similarly for the DJIA, after two consecutive down week, it also closed the week with a gain at 15,248.10, the Nasdaq 100 closed up for the week at 2990.87, and the Russell 2000 closed at 987.62, up for the week.

From the charts below, they show the market indices are still below their recent high. Until these market indices move above their next level of potential resistance and put in a new high, any rally should be treated with suspicion. During the recent market pull back, the market internals have been damaged and they need to be healed before a sustainable uptrend can be resume. Until a new confirmed high has been put in by the DJIA, one should continue to trade cautiously. Just remember, there will always be trading opportunities in the market. In the current market environment, it is better to be 'out wishing you are in' than 'in wishing you are out' if the recent bounce turns out to be simply a dead cat bounce.

(click on the chart to get a larger view)
SP500 Daily:



SP500 Weekly:



DJIA Daily:



DJIA Weekly:



Nasdaq 100 Daily:



Nasdaq 100 Weekly:



Russell 2000 Daily:



Russell 2000 Weekly: