August 8, 2008
For the sake of the bulls, today is the most significant day in the markets since the March time period earlier this year, when Wall Street finally put together a descent multi-month rally. Today the S&P and Nasdaq both saw important breakthroughs of overhead resistance that cannot be ignored. Financials are showing strength and oil is dropping like a rock. And when bubbles burst, the selling tends to escalate over time, as more and more people panic and sell their positions, especially since much of the run-up was speculation driven – so now they are running for cover.
We expect to see some of the positive vibes experienced this week to carry into next, but don’t be surprised if we have a couple of rough patches due to profit taking, or a weak economic report or two. Barring any major financial disasters, the market is positioned to do well in the week ahead. Be sure to read our weekly summary to be posted this weekend.
Here’s the Nasdaq and S&P charts…