03.20.09

3.20.09           

       The market did an about-face on Thursday, and it continued into Friday. For the week however, it did show a small increase. The Dow-Jones Transportation Average is the one to keep your eye on this next week. What we will be looking for is for the DJTA to stay above its 21 day moving average along with the other major indices. The DJTA usually leads the market up as well as down. The 21 day M.A. is now considered a support line. If it breaks below this it will then become an overhead resistance point.

            We are calling this a Potential Pivot Point or a Triple P. We will be watching this very closely and keep you informed of any movement. Do not take this to mean that the market may be changing into a ‘Bull’ from a ‘Bear’. What it means is that it may be a bull rally in a bear market. If so, it has substantial upside potential, even if it fails again at the overhead resistance at its 200-day moving average. It could move further than that if it were to be a typical 50% retracement of the previous decline before the downside resumes.

            It is encouraging that the S&P 500’s Internal Strength Index did not confirm the

S&P’s last low because its Internal Strength made a higher low. That is frequently an early sign that a rally is due, and so we will see if it will work again. Stay tuned.

For now however, we remain 100% in cash and waiting.

Until next time

The MTA Staff