Friday, December 18, 2009 Market Commentary: The major averages ended the week mixed as the US dollar continued to rally and investors digested a slew of economic data. Stocks closed higher on Friday as volume, an important indicator of institutional sponsorship, jumped above Thursday’s levels due to quadruple witching. Advancers led decliners by an 11-to-8…
The US dollar dominated the headlines on Thursday, and sent a slew of dollar denominated assets lower (mainly stocks and commodities). The major averages continued pulling back from important resistance levels and appear to be headed for support (just above their respective 50 day moving average lines). Until either support or resistance is breached, expect this bracketed (sideways) action to continue.
On Wednesday, the major averages closed near important resistance levels as leading stocks were mixed. The Dow Jones Industrial Average and benchmark S&P 500 index closed below 10,500 and 1,115, their respective resistance levels. The Nasdaq composite closed just above 2200 which has served as an important level of resistance for the tech heavy index in recent months.
At this point, the action remains healthy as long as the major averages remain above their respective 50-day moving average lines. So far the market has held up rather nicely to the slew of economic data that was released this week. As long as this action continues, the major averages deserve the bullish benefit of the doubt.
On Tuesday, each of the major averages pulled back from logical resistance levels as leading stocks were mixed. The Dow Jones Industrial Average and benchmark S&P 500 index closed just below 10,500 and 1,115, their respective resistance levels. The Nasdaq composite closed just above 2200 which has served as an important level of resistance for the tech heavy index in recent months.