Weekly Stock Market Analysis 8/26/06

The Nasdaq has developed a trading range between its 200 Day EMA (blue line) near 2175 and its 50 Day EMA (green line) near 2120. We will likely see the Nasdaq break out of this trading range before much longer. If the Nasdaq can rise above its 200 Day EMA near 2175 then I would expect its next area of upside resistance would occur in the 2195 to 2235 range. The 2195 area (point A) corresponds to the Nasdaq's 50% Retracement Level (calculated from the April high to the July low) and is also where it stalled out at in early July. Furthermore the 2235 area (point B) corresponds to the Nasdaq's 61.8% Retracement Level and is also where it stalled out at in early June after attempting to rally from oversold conditions. Meanwhile if the Nasdaq were to break below its 50 Day EMA near 2120 then I would expect to see an eventual retest of the mid July low near 2010.

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Stock Market Analysis for 8/19/06

Although we did see an impressive rally this week one thing to keep a close eye on is the Volatility Index (VIX). The VIX is quickly approaching a level (black line) that has eventually signaled a nearing sell off during the past year below a value of 11. If the VIX continues to drop and falls below the 11 level within the next week or so this could be a signal of a nearing sell off. Also the last time the VIX rose rapidly (points A to B) this was then followed by a quick drop (points B to C) back in June which was then followed by a substantial sell off in the S&P 500 (points D to E). Thus keep a close watch on the VIX over the next week or so because if it drops below 11 this could be a signal of a nearing sell off as we move into the month of September. Also keep in mind historically September has been the worst performing month for the market by a long shot with the Dow being up only 37% of the time since 1900.

You can read our complete market analysis at

http://www.amateur-investor.net/Weekend_Market_Analysis_Aug_19_06.htm

Stock Market Analysis for 8/12/06

The S&P 500 is exhibiting a potential Double Bottom pattern although the 2nd bottom was not as low as the 1st bottom so it's not a classic Double Bottom pattern from a technical point of view. So far the S&P 500 has held support at its 200 Day EMA (green line) just above 1260 and if it's going to maintain its Double Bottom pattern it will need to continue to do so next week. If the S&P 500 were to break below the 1260 level then it may eventually retest the 1220 to 1225 range which corresponds to the lows made in mid June (1220)and mid July (1225).

You can read our complete market analysis at

http://www.amateur-investor.net/Weekend_Market_Analysis_Aug_12_06.htm

Stock Market Analysis for August 6th

There is a Federal Reserve meeting next week so expect an increase in daily volatility in the major averages. Meanwhile if we take a look at a longer term chart of the S&P 500 so far it's acting similar to what occurred in the Spring and Summer of 2004. Back in 2004 the S&P 500 peaked in March and then developed a similar potential Double Bottom pattern. However the S&P 500 then stalled out in June which was eventually followed by more selling pressure before the real bottom occurred in August (points A to B). Thus it will be interesting to see if the S&P 500 takes a similar path in the weeks ahead.













Our complete Stock Market Analysis can be found at
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