- Will The Bulls Respond?

Market Summary
In our last report, we mentioned that several of the major indexes moved below the supports of their respective 200-day moving averages. This move below the influential support level will be used by traders to suggest that the bears will remain in control of the longer-term momentum. Given the shortened trading week and the lighter-than-average volume, we believe that many traders are questioning whether the gains will be enough to trigger more upside momentum.

In addition, even though the bulls were able to send the S&P back into positive territory for the year, we feel that the overhead resistance of the 200-day moving average may be too overwhelming to convince traders that the upward rally will be able to continue. It is still probably a good idea for longer-term investors to wait on the sidelines until things cool down. If you are a short-term trader, it may be a good idea to be extra careful in your stock selection as the markets may need some time before they reveal their next major move.