Wednesday, May 11, 2005

A Watched Pot.....

After generally pushing higher for seven days in a row, the stock market finally gave us bears some relief by losing over one hundred points on Tuesday, May 11th. This was critically important, because all of the indexes backed away from critical resistance levels which, if overcome, would have made a much weaker case for a falling market.

Regretably, this was a one day wonder, because the markets edged a bit higher on the 12th of May. As the chart indicates, what made this particularly maddening was that the first few hours of the day continued the downward direction, but after a peculiarly quick and deep dip, the markets reversed course, erased all the losses for the day, and tacked on a few points.

We are near or at resistance levels once again, so once more it's quite unclear where things are headed. A break above resistance would be powerful, since it's bumped against it so many times already. What I'd prefer to see (not that the market cares....) is for the lows set on the 11th to be taken out and then the lower lows of April 20th to be violated as well. Until then, we're just bouncing up and down with no clear direction whatever.

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