Market Update: July 9, 2009

The stock market continues to show indecision as the major indices closed only fractionally higher today.  All major indices closed up, but we continue to be in a wait-and-see pattern to determine the market trend.

S&P 500 Daily

The S&P 500 is the only one of the three major indices that continues to hold support.  The last two-days, the index has managed to close slightly above the 879 support level established in May and tested in June and July.  Some argue that the S&P 500 has fallen below the neckline on the recent head-and-shoulders pattern.  Though true, it remains to be seen if the index can push below the critical resistance level in the upper 870s.

DJIA Daily

The Dow Jones Industrials Average and the Nasdaq Composite also remain stagnant over the last two days.  However, unlike the S&P 500, they broke their support levels earlier this week and have been unable to break the resistance.

Nasdaq Composite Daily

The bottom line remains: the markets are flirting with a bearish trend, but have resisted going all in.  We must await confirmation of direction.  Personally, I entered contra-ETFs on Monday and continue to hold a contra Dow (QID) and Nasdaq (DXD).  (I am not in the S&P 500 contra-ETF (SDS) simply because of not getting in at the signal.)   Though I have seen initial unrealized gains, it is yet to be seen if the trades will prove profitable or simply be a push.

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