Our proprietary ‘Momentum’ indicator has been in a sideways move since early September.There is no upward momentum – only a sideways trend with a slight downward inclination. This indicates that the growth prospect for the major UK and US stock market indices is stalled and may be limited.
This was reflected in the lack of upward movement in the indices last week and, more importantly, it implies a potential for a top to form and for the indices to trickle downwards.
At this stage any such retracement in the market indices looks as though it should be relatively gentle as there is potentially strong support not far below current index levels (see the individual markets analysis). But the danger then will be that a relatively gentle correction can turn nasty and morph into a full blown retreat. That remains a possiblity, we think, for 2010; at the moment the dominant trend is still North facing and, as such, it promises higher share prices to come but this can only happen if the resistance pressures lying just overhead (see the individual market analyses) can be overcome; with a moribund ‘Momentum’ indicator this is problematic.
Individual market commentary and illustrative charts are available at http://www.sharehunter.com/news/market-review/
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