Market Commentary – August 29th, 2011

I’ve been traveling the last couple of weeks and apologize for not posting on a regular basis.

A Few Thought Before the Open:

Despite the move higher last week,  the overall market looks to be consolidating at these levels and more or less tracking sideways.  The Dow Jones Industrial Average is a good example of this.  The Dow closed Friday at 11,284.54  With the way individual stocks and market averages tend to fluctuate,  a 9-day moving average is generally considered to be somewhat “neutral” in terms of a directional indicator.  Market technicians tend to like to plot out “envelop channels” from the 9-day moving average,  which are basically an attempt to determine if movements above or below the 9-day moving average are out of line and a sign of being over bought or sold.

My models are showing that the fluctuations in the Dow are basically within the normal fluctuations around the 9-day moving average.  What this is telling me is that as of right now, there is no clear indication that the market is set to rally back up to its previous highs, or anything close to them.  Additionally there is no clear indication that the market is going to fall off a cliff again either.

As of right now,  I am looking for a consolidation at these levels.

I’ll be back with more after the close.