Thursday, November 06, 2008

Stock Market- Which Way Will It Go?

Stocks were down again today with the Dow Jones Industrials down almost 5%. It's a little difficult to determine which way the stock market is going to go from here especially ahead of the unemployment number which will be released tomorrow morning.

If you recall the price action from last week we saw all the major indices form weekly bullish engulfments on good volume but now we are seeing a pullback within last week's rally. I think a move back above this week's high will trigger a new leg up for stocks however a move below the trendline (see above chart) will most likely take the market back down to test the recent lows. Basically I'm using the trendline and this week's high as pivotal areas for me to enter the market. Until then, I'm staying of the market and will wait for a clearer picture to develop.

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