Monday, April 14, 2008

Stock Market (part I)

I just got back from visiting the States for a few weeks. all the news the last few months had me envisioning an America mired in stagnation on the verge of starvation, lines at the soup kitchens &c. but no, the bars were full and the malls crowded. business conditions certainly appeared no worse than four or five months ago.

over the next several posts I will examine the current state of the Stock Market. I will try to lay out all the evidence as fairly as possible, and hopefully arrive at a viable forecast for the mid-term direction of the major indices and identify the probable leaders among the various industry groups.

to start with, the broader market has been in a range since January, as this chart of the Dow Industrial Average clearly shows:

before too long trading will move beyond this range, the Dow will tell us which direction it wishes to head, so there doen't seem to be a lot to be gained from predicting which way it'll go now. however it is interesting the Dow has so far found support at the old high water mark of 2000.

in my next post I'll take a closer look at the Dow Transports, which are at a very interesting technical juncture.