February 25, 2008 Stock Market Recap

For the second session in a row we got a rally based on “news” related to bond insurers. The gains were enough to push the S&P 500 through the top of its triangle but not enough to get it above the February highs. Clearing that peak is a must in order for the bulls to establish a pattern of higher-highs. The 1,400 area already had a lot of congestion (resistance) and now it’s also got the 50-day moving average — currently at 1,395 — piling on.

Today’s move had less impact on the Nasdaq chart. It’s still within last week’s range.

Ditto for the small caps.

Trend Table

We’ve got improvements in all the short-term trends today.

Trend Nasdaq S&P 500 Russell 2000
Primary Down Down Down
Intermediate Down Down Down
Short-term Lat(+) Up(+) Up(+)

(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend

*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.