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| Commentary for the week ending March 23rd. 1. Dow Jones and S&P 500 The "Old Economy" indices could on Thursday make up for most of their losses, even though they still closed in negative territory. On Friday both markets managed to deliver decent gains. Combined with the sharp decline on Wednesday the SPX generated a morning star pattern, while in the DJIA the profits on friday where too small to lead to this pattern. For the next week I would expect a recovery in either of the markets, with more upside potential in the SPX. The overall downtrend shouldn�t be brought to an end by that and after this countermovement I would, requiring a sell signal, boost my put positions. Until the SPX doesn�t close above its last important relative low at 1275 (DJIA: 10150) the general bearmarket-situation will not change. 2. Nasdaq 100 The Nasdaq tried to break its downtrend on friday, but failed and closed below it. Should it break this trendline in the coming week, I will sell my puts, but for buying calls I will wait at least until the market closes above its last important relative high 2000 points. The downtrend at the moment is at 1750 points. Have a good trading week ! Martin Hertel |
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