May 20, 2008

Spiking oil and a not-so-great PPI report sent the markets down today on a descent amount of selling. Even still, we don’t view today’s action as a change in direction for the markets. No trend lines, and no support levels were broken. At this point we still remain bullish on the markets and its ability to sustain the current rally. Volume was average at best and didn’t really give any real indication that the bears were taking control all of a sudden. In fact, today’s sell-off was overdue and gave us a much needed washing of the hands. We’ve been overbought for quite some time now, so this could be viewed as rather a necessary evil in order for the markets to continue its upward march.

Here’s the NASDAQ and S&P Charts…