Stock market week in review

The Dow spent this past week at the top of its trading range not able to move higher and with a low volume retreat on Friday.  Ameliorating Friday’s down move was the close in the middle of the day’s range and volume lower than the previous two days.  This suggests that demand is present. The S&P is below the top of its trading range and the Nasdaq composite is still above the top of its trading range. The Dow is in the middle of its bullish trend channel. It could lose approximately 200 points and still be above the bottom support line of the bullish trend channel.

The three major stock indexes follow each other most of the time. But the current divergence wherein the Nasdaq is over its trading range while the Dow and S&P are still below theirs is cause for concern. Either the Nasdaq will pull up the Dow and S&P so they are all above their trading ranges or the Nasdaq itself will drop back into its trading range.

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