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Tuesday, March 19, 2024

Weekly Market Report

Weekly Market Report for February 7th, 2010 – February 13th, 2010

Courtesy of InTheMoneyStocks

The SPX closed lower for a fourth consecutive week. However, all the major indexes staged a sharp high volume reversal on Friday February 5th into the close. This reversal back to the positive side on Friday afternoon was for 22 points off the lows on the SPX and 177 points off the lows on the Dow Jones Industrial Average. It is also important to see how the markets often mirror the past. The last time the SPX pulled back was from June 8th – July 10th 2009. This 4 week pullback from the high in June to the closing price on early July 10th was about 87 points. Last week was also a 4 week pullback from the January 11, 2010 top to Friday February 5th closing price for about 84 points. How is that for symmetry? Last week we also mentioned the weekly 1050 support level which was briefly peirced and recaptured into the close on February 5th. We shall see if the market can bounce from here. 

The GLD closed lower much like the major stock indexes for the fourth consecutive week. However, the GLD caught a strong bid late in the day on Friday February 5th in a broad based market rally to close near the 105.00 support level. The catalyst for the recent decline in gold and the stock market has really been the stronger U.S. Dollar. As soon as the dollar hit major resistance levels on February 5th everything inflationary could a strong bid. Currently gold seems to trade right along with the market as all the rallies in the stock market have been inflationary in nature.  

Last week we stated that the USO continues to trade in a long sideways base since the June 2009 high. This remains the case. Oil currently seems to sell off from the high range and bounces higher after a good pullback. Many traders have pointed out the small head and shoulders pattern that can be seen on the weekly chart with the neckline colored in red. Should that pattern play out to the downside the 30.00 level would be the target. Overall the USO is still in this sideways channel and holding steady at the weekly 50 moving average. As long as the USO stays at or above the 50 moving average it could trade higher if the over all market does. Please remember oil is very sensitive to adverse weather, geopolitical events, and the U.S. Dollar.

The U.S. Dollar Index played out exactly as mentioned in last weeks report. The DXY traded right into the weekly 200 moving average on Friday February 5th. Last week we said that this would be the likely target for the dollar as often a stock or index tags or pierces a major moving average when it gets that close to it. Please note that once the dollar began to pullback from the moving average resistance level the stock market and every inflationary stock caught a major bid. The catalyst for the stock market rally from March 2009 has been the weak dollar. Since the dollar had been stonger the stock market has struggled. Therefore, in my book every trade is a dollar trade.   

If you would like more daily up to date information on cycles, pivot dates, DJIA, SPX, NASDAQ, Oil, Gold, U.S. Dollar, and more, visit the RESEARCH CENTER.  

 

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