Well that was one of the more interesting holiday week that I can remember. The stock market continued to be the tail wagged by the currency (and other) market(s). The effect of the weakening dollar early in the week was offset by the Dubai debt woes at the end of the week. The result was an 11 cent gain in the S&P and an 8 point loss for the Nasdaq. It would be easy to call the week a wash but there are some bearish developments in financials (see GS and XLF below) and there's still the possibility of more Dubai related fallout.
The Nasdaq reacted to the Dubai news with a huge gap down on Friday. That gap closed the November 6th gap up. It rallied intraday to close back above its 50-day moving average. I'll be watching 2150(ish) and the 50-day moving averages for clues to where we head next.
The S&P is threatening to break below its late November range.
The small caps continue to be laggards. They struggled with the 50-day moving average in the middle of the week and now look headed to the November lows.
Duru pointed out Goldman Sachs to me. (He also has an entire post about its breakdown.) This former rally leader is now lagging badly. It took out its November low on Friday and looks worse than the Russell 2000. If Goldman's hurting the lesser financials (and other companies) can't be doing well.. can they?
Goldman is even doing worse than the broader financial sector. The XLF is still 3 to 4% above its November low but it appears to be rolling over after hitting the wall at its 50-day moving average.
A few downgrades
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Up | Up | Up |
| Intermediate | Lat(-) | Up | Down |
| Short-term | Down(-) | Down(-) | Down(-) |
(+) 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.
Volume is such an important indicator. I think you've pointed out a few interesting points on the various charts where, if given the full day of trading, volume would have been above average. Wise investors will see this as a leading indicator for Monday.