A Lower High
5th July 2009
A dismal jobs report put a damper on the financial markets 4th of July celebration of the stock market’s outstanding performance in the second quarter of 2009. Thursday’s fall of almost 3% took the SP 500 crashing through the support of its 50 day MA established only last week. Bullish traders are hoping the 200 day MA will provide some support in the coming week, but if the DJIA is any indication, that will not provide any support for the market either.
A fall below 875 for the SP 500 or 8200 by the DJIA would confirm that this week marked the first Lower High since February. The ‘green shoots’ appear to be suffering from the heat of a spring with too much sunshine and not enough rain to keep them from burning out. The financial markets need to catch their breath. A pull back of at least 10 % from the highs will give them time to digest recent gains, and give those investors who missed the boat in March and April another opportunity to get back in.
JD
