Editor's note:
this column was originally published on Capital Essence's CEM News on October 17, 2007. It's being republished as a bonus for the loyal readers. For more information about subscribing to CEM News, please click here.
Good Morning. This is Capital Essence's "Market Outlook" (the technical analysis of financial markets) for Thursday October 18, 2007.
As
expected, stocks staged a nice rally Wednesday morning after key earnings reports from JPMorgan Chase & Co. (JPM), Yahoo Inc. (
YHOO) and other companies topped Wall Street forecasts.
However, buying interest was soon faded and the market dipped into negative territory in a broad-based retreat amid another jump in oil prices to $89.00 per barrel, which followed the report that the Turkish Assembly backed a possible incursion into
Iraq.
Today bearish reversal bar had, technically, set the stage for a short-term correction. A decline to below 86.95 will confirm this. Support is about 84-81.
Let's take a look at the major indices:
The S&P 500 Index (daily) chart above addresses a short-term time frame. The index tested and held above support at the area of short-term moving average. This is encouraging. If history is any guidance, a retest of October's high should follow shortly. Support is about 1520. Resistant is at recent high about 1576.
The Dow Jones Industrial Average (daily) chart above addresses a short-term time frame. Similar to the S&P 500, the blue-chips had also tested and held above support at the area of short-term moving average. Again, this is encouraging. Support is about 13750. Resistant is at recent high about 14200.
Bottom line: as long as the market holds above today's low, the bulls should be given the benefit of the doubts.
Until next time, good luck!
(By: Michelle Mai for Capital Essence)
Note: Michelle Mai writes technical analysis for Capital Essence and is the editor of Capital Essence's "Market Outlook" newsletter. To receive the daily edition, please
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