Monday, August 10, 2009

A Light Volume Day For The Market

Today's down market action in the S&P 500 Index ($INX) occurred on light volume. From a pure technical perspective the market seems to be basing around the 1,005 - 1,007 area. This type of consolidation would be healthy for further advances in the S&P Index.

(click to enlarge)

s&p 500 index chart analysis August 10, 2009
In late July, the Financial Post noted in an article, Dow Theory Points to Start of New Cyclical Bull Market, that the theory signals a new bull market phase. If the theory proves correct and the market can hold the 1,007 level, the next resistance for the S&P 500 Index would be 1,044. There are some good comments to the Dow Theory article on Seeking Alpha.

There seems to be a number of fundamental reasons why this market should not go higher (maybe this is why it will), so investors need to be disciplined in their equity purchases.


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