6-2-08: Weekly Market Update (Dow,S&P)

Last week was a very interesting week.    We were looking for a trend to develop since the charts were telling us there was a lot of conflict.
Here is our weekly percentage chart for all three key markets.     The S&P is still leading the way in being more bullish then the NASDAQ and the Dow.   However, notice the Dow broke through a couple of support lines whereas the S&P bounced off it’s support line.   Therefore, the percentage weekly chart is showing S&P is more bullish then the Dow.     If you were trading the S&P stocks, you can look for bearish opportunities in the Dow to hedge your portfolio.
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Below are the weekly charts for the S&P and the Dow.     Both are still bearish.  However, notice the S&P closed ABOVE the Kijen Sen last week whereas the Dow didn’t not.     The 1390.28 Kijun Sen value is going to be a strong support now for the S&P long term.       Notice, the volume that was “registered” last week.   It was extremely low.   Therefore, the positive week last week may not last since volume decreased drastically.
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Below are the daily charts for both the Dow and the S&P.  Both show bullish but they are in a pull back mode.   If the pull back occurs too drastically then the bullish momentum on the daily will be gone.      From the daily S&P chart, it can be seen that if the price crosses above the Kijun/Tenkan Sen then the pull back is possibly over and it may continue to the upside.     We will have to watch what happens around 1406.66 for the S&P.
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In conclusion, there is still a lot of confusion where there are no direct long term trades for the S&P and Dow since they are NOT TRENDING.   However,  you can play this market indirectly by finding Daily bullish Ichimoku trends for S&P stocks and Daily bearish Ichimoku trends for Dow Stocks.   This will create a nice hedged portfolio.
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About the Author Manesh Patel