Market Update

Posted by downtowntrader | 6/28/2006 10:04:00 PM | 0 comments »

Not much really happened again today as the markets have been happy to stay in the current trading range. Lately, trading typically gets light coming into the Fed meeting with lots of wild swings following the meeting minutes release. It will be interesting to see how the markets react, as it seems like everyone expects this meeting to set the tone for the market in the near term. Here are updated charts on the Nasdaq and SP500.

The Nasdaq has held this very steep channel so far and while I still don't expect it to hold the channel, there is still a farily decent chance it takes another leg down. It looks like we will at least get a retest of the recent lows. I am watching the range shown by te horizontal blue lines over the recent price action. We are in a trading range until either of those lines are taken out on a closing basis.

The same goes for the SP500 chart, except that the index remains in the longer term channel while the nasdaq has remained below the channel.

The longer the indices remain under the 200 sma the more likely that we have indeed entered a bear market. Some can argue that we are in a secular Bear market following the 2000 top and that we are now at the end of the cyclical bull that started in 2002. What will be interesting to see if we indeed are headed toward extended weakness, is how the impact of so many hedge funds and program traders will be felt.

Good Luck out there,