Stock Market Overview

Apr 26, 2008: 12:26 AM CST

Let’s take a quick ‘fly-by’ of the major US Stock Market Indexes for clues about what may happen next week:

Some observations about the daily chart of the S&P 500:

Price is testing upside resistance via horizontal line.

The 20 and 50 period moving averages completed a bullish cross (green arrow).

There is semi-strong support via an upside trendline (not drawn) off the March lows.

The moving averages could provide support when/if tested.

The falling 200 period moving average is bearish, and could provide resistance should the market trade higher.

There’s a slight flat momentum divergence with price as it swings higher.

Let’s pull it back to the Weekly Chart:

Quick observations about the S&P Weekly chart:

Price is trapped between the key 20 and 50 period moving averages.

The falling 50 may provide a bit of preliminary resistance

Price supported on the 200 period weekly average.

The recent up-swing is occurring on reduced (relative) volume (bearish non-confirmation)

There appears to be a strong resistance level (via horizontal line) about the 1,430 level.

Conclusion:

Remember that the Federal Reserve makes its policy announcement next week, and is generally expected to cut rates 25 basis points. This could be bullish for the market, but is the market already pricing this expectation in?

Be careful next week – “Fed Days” can be very volatile and unpredictable (especially for newer traders).

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