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.
Looking at the recent action in the market, the major averages continue acting well as they remain perched just below resistance (their respective 2009 highs) and above their respective 50-day moving average (DMA) lines. Both these factors are considered healthy and bodes well for this 8-month rally. The Nasdaq continues to experience formidable resistance just above 2,200 while the benchmark S&P 500 Index faces resistance just above 1,115. The blue chip Dow Jones Industrial Average remains the strongest of it peers and currently faces resistance just above 10,500. Until the major averages close above or below support or resistance, expect the bracketed (sideways) action to continue.