September 6, 2006 Stock Market Recap
A quick note — since I’ll be on the road there won’t be any recaps or watchlists for the rest of the week.
I can’t say I’m surprised to see today’s action given the low volume rise I talked about yesterday. Things could get interesting now as the folks who just had to chase & bought the last few days decide whether or not to bail. As you’ll see in the charts the indices are at or near ~6 week trendlines. It’ll be important for the bulls to defend those areas. If those lines break then I see the August 23rd / 24th lows as the critical line in the sand.
Here are charts of the Nasdaq, S&P 500, Russell 2000 (actually the ETF proxy IWM) and the Dow:
I’m downgrading the short-term trends since the indices dropped under their 10-day moving averages today…
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Lat(+) | Up(+) | Lat |
| Intermediate | Up(+) | Up | Up(+) |
| Short-term | Down(-) | Down(-) | Down(-) |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
This post has 3 comments
September 6th, 2006
Hey Mike…surprised you did not also note that the Nazz failed right at the lower bound of the former trading channel - the line connecting the 2004 and 2005 lows. Makes me wonder
about further out whether the Nazz has another trip to the bottom of its “new” channel waiting right around the corner. Would make sense to meet this line right back at 2100 or so in about 1 or 2 months! 
September 6th, 2006
I was waiting for you to mention it.
September 7th, 2006
Could you also give an analysis of the Dow Jones Transportation Average? According to Dow theory both the DJT and DJI need to be going in the same direction for bulls or bears to be in control.