NEW HIGH OR NOT NEW HIGH? -istockmarketnews.com New high, or not new high? That is the technical question in the week ahead for investors. The Dow, S&P 500 and NASDAQ are all within a few points of completely erasing March’s losses and reaching new 2011 highs. New highs usually means newer highs are on the way; so says the Investors’ Business Daily founder William O’Neil. If the trio can do it in chorus, iStock would see the indexes’ agreement as a strong indication that Mr. O’Neil will be correct – stocks march on. iStock sees a 70% chance that the indexes tack on some more green. The undercurrents on their charts are flowing in the right direction; relative strength is improving, with more room to move higher, and the short –term moving averages are crossing above the longer-term averages, lining up in bullish order from shortest-to-longest. The 30% chance stocks head south depends on if the Street starts to pay attention to oil prices again. Last week, black gold didn’t wait for stocks to hit new highs, closing at $108.36. But don’t worry too much if the focus of Wall Street’s attention shifts, initial support levels aren’t far below: • Dow: 12,250 • S&P 500: 1315 • NASDAQ: 2750 Even if the indexes hit our backstops and rally from there, a higher low would be another sign stocks are most likely headed up.
MARKET TYPE: Sideways Volatile Add another 1% gain and this model will move into the buy column. Couple it up with a volatile reading, and bulls could press down on the accelerator. MARKET LEADERSHIP: Sell The NASDAQ once again moved to the back of the pack. As a result, this score slipped in the past week. iStock would be far more comfortable, and convinced a rally has the legs for the distance, if the NASDAQ was pulling the cart instead of riding in it. MOMENTUM MODEL: Buy Hey, hey, we have an indicator that goes back to the good way. Mo goes green with a score of 4.73; however, the short and long ends are pointed in the wrong direction. iStock hopes the recent increase in volume means the duo will reverse course and get back on track.