Weekly Market Report for February 28th, 2010 – March 6th, 2010
Courtesy of InTheMoneyStocks
The S&P 500 closed the week lower by less than 5 points. The broad based index has recovered 60 points from it’s February 5th pivot low. The 1150 level was the January high and is still resistance. The current pattern on the chart can go either way. It is possible that last week was a pause before another push higher. However, it is also possible that it is a short term retrace pattern before another move down. Technically the chart is still strong as the weekly 20 moving average is still significantly above the weekly 50 moving average and this signals that the trend is still up on the weekly chart. Should the SPX decline there is still weekly suppport at the 1050 level.
The SPDR Gold Shares ETF GLD finished the week basically flat this past week. The action was volatile throughout the week as the GLD traded as low as 106.60 and as high as 109.97. It is important to remember that gold is a double edge sword trade. Investors buy gold often as a play against the U.S. Dollar and most fiat currencies. They also buy gold as play aginst overall market fear. Technically the GLD is still in very good shape as the weekly 20 moving average is still above the weekly 50 and 200 moving averages. The one short term bearish case that can be made against the GLD is that it is possibly making lower highs and this must be watched. The dollar should also be monitored closely as gold and the dollar generally trade inverse to each other.
The U.S. Oil Fund ETF(USO) finished the week basically where it began. The USO is now nearing the high range that it has been in since June 2009. Until the the USO breaks out or below the range these levels should serve as good resistance and support. While the USO is trading above it’s weekly 50 moving average it is still not technically very convincing. However, as long as the USO stays above the weekly 50 moving average it can trade higher.
The U.S. Dollar remains one of the most important charts that must be followed and watched. When the dollar declines it gives a lift to most commodity and inflationary stocks. Since the late November rise in the dollar the stock market has paused and pulled back. When the dollar declines it is prudent to expect the stock market to rally. Should the dollar continue to consolidate on the weekly chart it is likely that it will trade higher, however, the weekly 200 moving average is still resistance.
