Summary for Week Ending 22nd September 2006
Nothing unusual in the news this week, just the usual suspects of terror, war and civil unrest seemingly everywhere.
Last week...
The market crept to a new high this week only to retreat fairly quickly. The problem with this kind of behavior is that its so obvious.. a reversal near an old high is almost expected. The question is, if this is the end of the run or are we going to keep going forwards? Oil has to play some role in the answer as its again heading south so that should take pressure off the economic impact (not that $60 a barrel is cheap) but the longer term is still under a cloud. If the market has made a cyclic high then coming off a false break to the upside, although very minor, I would expect the market to peel off from this level fairly quickly. Confirmation would come in the form of a lower swing high, but the initial drive downwards should go someway towards the 1291 level at the very least. If its quick to go down then the supposed counter trend rally from this point should take much longer with a rally back to at least 1312. This is of course all supposition, but you have to start somewhere.
Next Week...
I'll be looking at how much this market contracts and if indeed we do get a pull back to the 1290 area. As I said, it should be swift, so we'll just have to wait and see.
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