Stock Market place Update: October 23, 2006

Report by Stephen Oakes

With the Dow breaking out more than the crucial 12,000 mark the time has come to establish the wellbeing of the general markets. In performing this analysis it is essential to also assess other indices such as the NASDAQ and the S&ampP 500.

&gt&gt&gt Dow Jones Industrial Typical (DJIA) – The Dow Jones has continued to carry out well recently which is in line with our prediction that leading significant cap firms would lead the charge during the rest of this decade. On a five-year monthly chart you would discover that the Dow has broken out from its consolidation period and is splitting the upper and reduced Bollinger Bands apart. When the Bollinger Bands tighten we are to assume that the index, or stock, is trading within a consolidation assortment. For the Dow, this assortment was between ten,000 and 11,000. So, when the stress was lastly released, the Dow Jones broke to the upside. I believe the market place is only in the starting stages of its following strong move to the upside. The purpose for this assumption is due to the simple fact that the MACD and DMI indicators carry on to signal investors to get. Until 1 of these two indicators fails, I would advocate that you take benefit of what the marketplace is telling you.

&gt&gt&gt S&ampP 500 Index (SP500) – The S&ampP500 is a major index, so the query I would inquire myself is, “Are the recent highs of the Dow Jones justified?” Yet again, from seeking at a 5-year monthly chart, the solution is an evident yes. This index continued to trend north and is supported by a latest breakout from consolidation. In addition to this, the MACD and DMI also hint that this is a acquiring chance for the prolonged-expression.

&gt&gt&gt Nasdaq Composite Index (NASDAQ) – The NASDAQ’s five-year month-to-month chart tells the exact same story, but in a slightly distinct way. In this case only the DMI has signaled purchase, although the MACD has however to turn constructive. Even though the Dow Jones and the S&ampP500 jump out to an early start, they will not experience the explosion out from the gate that the NASDAQ will. The NASDAQ is even now trading inside of its variety between two,000 and 2,500. Also, the Bollinger Bands have not split open but (signaling volatility), but I would not expect that to occur until the NASDAQ surpasses the two,500 mark. Until then, I am pleased to know that the NASDAQ will eventually breakout and with excellent conviction. This is due to the truth that the lengthier an index or safety trades in a tight array, the far more stress and momentum will be present when the massive move finally does occur.

General, two out of the three major indices have begun their up coming climb and appear to justify every single other’s moves. Once the NASDAQ is lastly on board I feel there will be hefty getting across the board, indicating that the late 2000s stock industry boom is for genuine.

Excellent Investing…

–Stephen Oakes

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