The SPX continues to go sideways right at the 944 swing high from 1/6/2009.  We have a Bull Flag that moved through the 200 SMA on June 1^st and has essentially flattened out since then.  The current breakout high from the flag is yesterday’s high of 956.  A break and close below the 200 SMA and then subsequently the 50 SMA would portend a bearish trend reversal.  930 and 875 are key support levels.  Don’t try and guess direction coming out of a consolidation pattern.  Just wait for the market to commit to a direction and play it accordingly.     

The DOW ended the week with its 9^th narrow range, flat session in a row.  Volume has been decreasing which confirms the lack of short term interest in taking the index higher.   Both the SPX and the DOW are poised to go higher as soon as they poke their heads above the high in the flag with some convincing volume.  The 200 SMA has acted as solid support for the DOW with the next stop on the ‘Bull Train’ at 9088, the swing high from 1/6/2009.   The SPX is targeted for 1007.

The COMPQ looks like it’s forming a rounded top just shy of resistance at the gap at 1905 from 10/6/2008.  This index has been the leader since the March lows and I don’t anticipate that changing.  Look for the index to challenge 1905 soon.

Week over week, the DOW was up 36, the SPX better by 6 and the COMPQ increased by 10.  Learn to make money in the Stock Market!!  Click Here!!

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