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Saturday, May 17, 2008

Weekly Charts

On the weekly charts, the SPX appears to be at a crossroads. Do we go into bull territory, or back down to bear? Are we out of the woods, as Cramer s saying, or are we in the eye of a hurricane? Let the charts determine that.

The Nasdaq appears to be trying to establish a new bull market, with a very steep ascent from a deep base. Stochastics are getting into overbought territory, but not as overbought as the SPX appears. We have been getting some sector rotation into tech, let's see how long that lasts.

Before we get carried away, let's look at another time when similar situations occured. The market rallied sharply from steep declines, the financial gurus were telling us the botto was in, the economy appeared to be recovering, we were told all was well. those were the two boxed in areas of the chart above, which s the SPX from January 2000 to December 2002.

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