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Friday, December 26, 2008

Road To Nowhere

For a full day of trading, we got barely more volume than on the half day we had Wednesday, which shouldn't be terribly surprising. We did stay well above this week's low, which is a positive sign, and are well below the 50dma, so there is room to move up. MACD is tantalizing us with an almost crossover, but trying to time trades with it now will probably just get us whipsawed. The Santa Rally, such as it is, is still intact, just not very impressive.

The Nasdaq was the weak sister today, and barely budged. It also has room to move up before any serious resistance. XLK, technology, started the day decently, but ended up the weakest sector.

The Russell 2000 made more than double the move of the SPX, and is slammed up against the 50dma. It is the index most clearly in an uptrend, and I expect that next week it should have no problems with the 5o day and test it's previous high. MACD shows that this is weakening, but still has the most upside momentum.

The only really remarkable thing about today was the turn around in the energy sector, which was lagging the market in the morning, but ended up being the leading sector. This is going to have a hell of a lot of resitance to get through, but this sure looks like a bottoming pattern.

With such low volume, and no clear catalyst for a direction, we are likely to stay in a pretty narrow range for the rest of the year. This is yet another of the anemic rallies we've been having since July, and the last two didn't pan out so well. We are on a road to nowhere.

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