Oil Prices Fall, Moving Averages Act As Resistance Once Again

DJIA + 52.19, +0.41% SP500 + 7.42, +0.53% NASDAQ Comp. + 21.62, +0.87% Russell 2000 + 7.09, +0.96% Oil closed at $126.62 down $4.41 Rising oil prices helped energy and basic materials stocks move higher on Wednesday. Falling oil prices sent energy and basic materials stocks lower on Thursday. The broad market found strength and moved higher as we wrote in our earlier post. An afternoon pullback had indices closing below their highs of the day. With energy and basic material stocks down on Thursday the broader market rallied. On the NYSE there were 1,929 advancers to 1,181 decliners. On the Nasdaq advancers led decliners 1,738 to 1,112. The rally found sellers in the afternoon as each of the broad indices ran into areas of resistance. The Russell 2000 had crossed its 200 DMA only to pullback and close just below acting as an area of resistance very much like it did back on May 19. The Nasdaq also crossed its 200 DMA on Thursday only to have sellers push it under by the close. A break above their 200 DMA would be a key pivot for both of these indices. The DJIA which is trading below its 30 and 200 DMA crossed above its 50 DMA only to have seller push price lower with a close just below its 50 DMA. The S&P bouncing off its 50 DMA traded above its 30 DMA only to fall back and close just below the 30 DMA. These moving averages are key areas of resistance. Stay focused to see if the indices can break above these key resistance areas or if they fall once again. Trade accordingly. MA was a big mover after the company said it expected double-digit net revenue growth in 2008 and double-digit profit and revenue growth over the next few years. Today’s Action Moving Up: MA, STRA, V, SOHU, CELG, GS, GRMN, EXPE, RIMM, ESRX, NKE, MS, Moving Down: FSLR, CLF, X, DRYS, USO, CF, CNX, BTU, MEE, PCLN, NUE, MOS, JASO, AGU, FWLT, MON, MTL, DECK Intermediate Term Market Trend: Neutral Short Term Market Trend: Up