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Joined: 28 Dec 2005 Posts: 11982
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Posted: Sat Aug 25, 2007 4:32 am Post subject: Consolidation Period |
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Below are SPX (large caps) and IWM (small caps) daily charts over the past seven months. SPX, which closed at 1,479 Friday, may pullback to the 1,440s, similar to the pattern in late March. IWM closed at 79 1/2 Friday, and may pullback to around 77 1/2. IWM has failed to close above its 200-day MA over the past month. The IWM 200-day MA may stop the SPX rally.
It seems likely, SPX will be in a trading range over the seasonally weak period. A successful test of the low, e.g. 1,400, is possible in September, and intermediate-term technical indicators continue to suggest a test of the high, around 1,550, before the end of the year. The new month begins after the Labor Day holiday a week from Tuesday.
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