Stock Markets Review

The current technical analysis of the-

• FTSE 100, the FTSE 250
• FTSE SmCap
• S & P 500
• DJIA
• NASDAQ 100

ANALYSIS FOR THE PERIOD  – 8th March 2010 to 14th March 2010

The Overall Market Rating (OMR) , below, represents the percentage of stocks in each index in Stages 1 and 2 (a potential or an actual Uptrend);

An OMR below 50 indicates a ‘bear’ market and above 50 is an indication of a ‘bull’ market. (The figures in brackets show the OMR for the previous week) -

In:	Stage1	Stage2	Stage3	Stage4	Overall Mkt Rating
FTSE 350	22%	51%	15%	12%	73. (71)
S&P 500	23%	51%	14%	12 %	74 (74)

The Overall Market Rating for the both FTSE 350 and the S&P 500 have fallen over the last few weeks. The main point of note is the reduction in the number of stocks in  Stage 2 Uptrends.  This is a reflection of the recent correction in share prices although, as the OMRs are still well above the ‘50′ level, the general market Uptrend is still in place so, whilst we expect occasional set backs, as currently, (see individual market analysis summaries below), the general movement of share prices should return to upwards. However, the drift of stocks out of their uptrends is always a first step of a potential change in dominant trend.

Identifying the Trend -

Stage 1 - Accumulation/Stock Basing                           Stage 3 – Distribution/Topping out

Stage 2 – Uptrend/Rising Prices                                     Stage 4 – Downtrend/Declining Prices

Below, we provide two charts for each of the five market indices analysed. The shorter term (3+ year) chart allows easier recognition of some of the more recent features that we may comment on and then a longer term (8+ year) chart which shows the important highs and lows of previous years. Please click on each chart to enlarge.

FTSE 100 - In  a  ‘Stage 2′ Uptend -( buying only but care needed) -

The fall to meet its 30wk moving average is a ‘normal’ event and is usually the signal for a change in direction. Just look at the long term chart to see the number of previous occasions back in the 2003-2007 ‘bull’ market that the direction of the index changed back after each correction to its 30wk MA.  The index has duly moved up solidly and left behind a new trend low right on the joint support of the 5100 level and the level of its 30wk moving average.  We have little doubt that the index will want to test the 5770 level but, before long, is also likely to want to retest the 5100 level again either by falling back to it or by just going sideways until the MA moves up to meet it. Either way it is not a good time to be buying heavily or specifically.

Chart (3+ year) -

Chart (8+-year) –

FTSE 250 – In a ‘Stage 2′ Uptrend ( buying only, but care needed) -

Although this index has managed to hold its own it has certainlybeen  struggling and not showing that it has great support . It is still above the important support level at 8888 and the dominant trend remains the Uptrend.  10500 is the next level of likely resistance but it does look some way just yet. It is significant that the index fell to meet its 30 week moving average and (as expected) and bounced. This created a new low and this is just above the important 8888 support level which should allow for further increase in FTSE 250 share prices on average. But there is still need for caution as another test of the 30wk MA level is quite likely. Any break below the MA and a break below the 8888 level would spell disaster for this index.

Chart(3+ year) -

Chart(8+ year) -

FTSE SmCap – In a  ‘Stage 2′ Uptrend  ( buying only but care is needed) –

Having tested the resistance at the important 50% retracement level at 2910 and failed to break above it on 2 attempts so far this index fell back to, and had remained with the level of its 30wk moving average. It should now put in more of a recovery but it is not looking very strong at all and any further weakness now will see the index destined for the 2700 level and, possibly, the 2425 level after that.

Chart(3+ year) -

Chart(8+ year) -

S&P 500 - In a ‘Stage 2′ Uptrend – ( buying only but care needed) –

This index really is still at a crisis decision point. It is still testing the important support/resistance area at 1111-1122.  Any weakness during the coming week is likely to take the index down towards a test of the 1000 level. And that could be the start of a more general decline. It is concerning that there are no other obvious signs of support apart from its 30wk. MA and the index remains at a critical and decisive level. If it does fall to the 1000 level then it is most unlikely to stop there and will go much lower!

Chart(3+ year) -

Chart(8+ year) -

DOW JONES IND – In a ‘Stage 2′  Uptrend – (buying only but care needed) -

This index has changed direction and bounced up from its 30week moving average twice now during this Uptrend and last week it put on some more growth. T here is therefore some hope that this index will continue upwards as it looks determined to test the resistance that will be found at the 10785 level. This week, or the next, are therefore quite critical for this index as it must retain support and not fall bact to ,or below, its 30wk MA otherwise it will quickly fall towards the 9705 level and that will have serious implications for the other market indices.

Chart (3+ year) -

Chart(8+ year) -

NASDAQ 100 - In a ‘Stage 2′  Uptrend  (buying only) -

The index managed to change direction after falling to the level of its 30wk MA. The 30wk MA did a good job and the index easily moved up through the  resistance of the 1827 level. Support looks strong and if maintained should take the index up towards a test of the 2040 level in due course. Otherwise, if support now fails, it will be a fats fall back to 1827 and then on down another test for support at the 1740 level.

Chart (3+ year) –

Chart (8+ year) -

If you have any questions or would like more information or would like to discuss market trends then do please email us at

sharehunter@btinternet.com

07/03/2010