The Stock Market Week - 5/1/2009 | ||
| It was an up week for the major markets. For the week the Dow Jones Industrial Average gained 136.12 points, or 1.69%. The Standard & Poor's 500 Index gained 11.29 points, or 1.30%, while the NASDAQ Composite gained 24.91 points, or 1.47%. The Utilities sector was the strongest sector (4.61%) last week followed by the Consumer Staples sector (2.74%). The Financial sector was the worst performing sector (-2.65%) of the week followed by the Industrial sector (1.57%). The Basic Materials sector is the most overvalued sector followed by Conglomerates while Agricultural Chemicals, Chemicals-Major Diversified, Copper are among the most overvalued industries. The Industrial Goods sector is the most oversold sector followed by Services while Education Training Services, Drugs Wholesale, Rental Leasing Services are among the most oversold industries. | ||
| Standard & Poor's 500 Index Trend Analysis Standard & Poor#39;s 500 Index is in a long-term downtrend that started on 10/11/2007 at 1576.09. According to the Elliot Wave Principle, the market’s progress ultimately takes the form of a five wave structure. The first (I) wave down has been completed on 1/23/2008 at 1270.05 and dropped almost 20%. According to the Wave Principle, the third wave is the strongest and the broadest, and it generates the greatest volume and price movement. The third (III) wave down has started on 5/19/2008 at 1440.24 and dropped more than 48.5%, reaching 741.02 level on 11/21/2008. From a long term perspective there are two scenarios that we are going to consider: Scenario #1: The last fifth wave of the long-term down trend has been completed on March 6th at 666.79. The first wave of a new long-term uptrend is in progress. See the chart below. | ||
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| Scenario #2: The forth wave of the long-term down trend is in progress and almost completed. The last fifth wave down is about to begin. The fifth wave will retest the March low and possibly move further down. See the chart below. | ||
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| Now the price is near the resistance level. Weekly Lane's Stochastic is oversold. Daily technical indicators are close to oversold area as well. In both scenarios the upside potential is limited and chances are high that price will turn down soon. The support is near 805 and the next resistance is near 944. | ||
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| Presented by www.thegreedytrader.com Research Group. | ||
Sunday, May 03, 2009
The upside potential is limited
