Hitting some resistance.. a look at the weekly chart movements..
May 24, 2009- Market Summary
The lackluster number of economic announcements last week gave traders very little reason to send the financial markets higher. From a technical perspective, the nearby resistance from the 200-day moving averages seem to have spooked traders into questioning the risk/reward of making trades at the current levels. This increased level of cautiousness has in turn put the brakes on the recent rally. It is also worth noting that a series of short-term double top patterns have started to appear on the charts, which is giving traders another reason to start taking their profit off the table.
It is important to note that bullish traders of the Dow and S&P500 may be more hesitant to take a position given the presence of its long-term averages. Especially when you combine it with the double top patterns shown on the charts. Many active traders will be keeping a close eye on the 200 DMAs because they are used by many traders to determine the direction of the market. A new uptrend will not be confirmed until we see a break above these important barriers. (To learn more about levels of resistance, be sure to check out the Support And Resistance section of our Technical Analysis Tutorial.)