The Stock Market Week - 5/30/2008 | ||
| It was an up week for the major markets. For the week the Dow Jones Industrial Average gained 158.69 points, or 1.27%. The Standard Poor's 500 Index gained 24.45 points, or 1.78%, while the Nasdaq Composite gained 77.99 points, or 3.19%. The Technology sector was the strongest sector last week followed by the Industrial sector. The Energy sector was the worst performing sector of the week followed by the Financial sector. | ||
Nasdaq Trend Analysis | ||
| Last week we expected that the QQQQ might see a brief rebound or pause. It was a positive week for the QQQQ. The QQQQ raised 3.76% for the week. | ||
| QQQQ Long-term technical analysis: Our long-term outlook has not changed. We consider two possible scenarios: Scenario 1. The long-term uptrend (10/08/2002 - 10/31/2007) is over, and a new long-term downtrend started on 10/31/2007. The sub wave 2 (0/31/2007 - present) is currently in progress and almost completed. The sub wave 3 down should start soon and break the long-term support trend line around 43ᇀ, and then it'll go lower than the recent low of 41.05 and move down to about 35 in the late fall. Scenario 2. The long-term uptrend that started on 10/08/2002 is still in progress, with sub wave 5 currently in progress. The wave 5 is usually tricky. It might be truncated and form a double top pattern or not even reach the previous high - 55.07. Which scenario we are going to see may depend on how successful the FED's rate cut would be. The FED's market regulation supposed to weaken the upcoming recession, but FED should not use their power to turn the recession into a new bull market. If FED overdoes the rate cut, we may see the scenario 2. With this scenario, by the end of the wave 5 FED will not have enough room for a new rate cut, and the next long-term downtrend would be even more severe. "This will probably not prove to be the final bottom" said billionaire George Soros, referring to the rally in stocks after JPMorgan Chase agreed to buy Bear Stearns on March 17. He added that the rebound might last six weeks to three months as the US moves closer to a recession. | ||
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| QQQQ Short-term technical analysis: Weekly William's Percentage Range (W%R) is strongly overbought and Lane's Stochastic is overbought, while daily technical indicators are neutral. The price is retesting the rising channel support. In our previous publication last week we expected the QQQQ brief rebound or pause. If long-term scenario #1 is in progress, then the downtrend may resume next week. | ||
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| Presented by www.thegreedytrader.com Research Group. | ||
Sunday, June 01, 2008
The QQQQ is retesting the rising channel support
