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Saturday, March 22, 2008 4:08:52 PM
Amateur Investors Weekend Stock Market Analysis (3/22/08)
http://www.amateur-investor.net/Weekend_Market_Analysis_Mar_22_08.htm
As expected it was a very volatile week due to the Federal Reserve Meeting and some key earnings reports from a few big Financial Institutions. Despite all of the volatility the major averages appear to be developing favorable Double Bottom patterns.
The Dow didn't quite retest its January 23rd low but it got close. If the Dow can follow through to the upside over the next few weeks I still think it has a shot to rise up to its 40 Week EMA (blue line) near 12800 or its 50% Retracement Level near 12900.
The Nasdaq also appears to be developing a Double Bottom pattern as well however there is a key resistance level to watch next week near 2320 (point A) which coincides with its 10 Day EMA (green line) and 23.6% Retracement Level. If the Nasdaq can rise above this resistance level then look for a possible move up to its 38.2% Retracement level near 2420 (point B) over the next few weeks.
As far as the S&P 500 it retested its January 23rd low on Monday and then rallied strongly on Tuesday setting up a potential Double Bottom pattern. The S&P 500 encountered resistance on Thursday at its 10 Week EMA near 1342. If the S&P 500 can rise above its 10 Week EMA then it may rally up to either its 38.2% Retracement Level at 1380 (point C) or to the 1420 level (point D) which coincides with its 40 Week EMA (blue line) and 50% Retracement Level.
One thing that gives me some optimism that at least a short term bottom is in place is the fact that the Slow Stochastic made a higher low (points E) as the S&P 500 made a lower low last week. In the past this type of of divergent pattern usually has been followed by a decent upward move in the following couple of weeks.
http://www.amateur-investor.net/Weekend_Market_Analysis_Mar_22_08.htm
As expected it was a very volatile week due to the Federal Reserve Meeting and some key earnings reports from a few big Financial Institutions. Despite all of the volatility the major averages appear to be developing favorable Double Bottom patterns.
The Dow didn't quite retest its January 23rd low but it got close. If the Dow can follow through to the upside over the next few weeks I still think it has a shot to rise up to its 40 Week EMA (blue line) near 12800 or its 50% Retracement Level near 12900.
The Nasdaq also appears to be developing a Double Bottom pattern as well however there is a key resistance level to watch next week near 2320 (point A) which coincides with its 10 Day EMA (green line) and 23.6% Retracement Level. If the Nasdaq can rise above this resistance level then look for a possible move up to its 38.2% Retracement level near 2420 (point B) over the next few weeks.
As far as the S&P 500 it retested its January 23rd low on Monday and then rallied strongly on Tuesday setting up a potential Double Bottom pattern. The S&P 500 encountered resistance on Thursday at its 10 Week EMA near 1342. If the S&P 500 can rise above its 10 Week EMA then it may rally up to either its 38.2% Retracement Level at 1380 (point C) or to the 1420 level (point D) which coincides with its 40 Week EMA (blue line) and 50% Retracement Level.
One thing that gives me some optimism that at least a short term bottom is in place is the fact that the Slow Stochastic made a higher low (points E) as the S&P 500 made a lower low last week. In the past this type of of divergent pattern usually has been followed by a decent upward move in the following couple of weeks.
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