Friday, December 24, 2010

A sideways move can work off an overbought condition

 Stocks racked up a fourth straight week of gains on Thursday, as investors expected optimism about the economic recovery to support equities through year-end.
The S&P 500 ticked lower on Thursday, the close of a holiday-shortened week, breaking five days of gains, in the lowest volume in a full-day session this year. Banks dragged on the market, giving back recent gains after a strong month.
Some technical and sentiment indicators auger for a near-term drop in stocks, but investors remain optimistic over the long haul.
Keith Springer, president of Springer Financial Advisors in Sacramento, California, said the market is more likely to trade sideways than fall dramatically.
"A sideways move can work off an overbought condition," said Springer. "Just the fact that it slows down and moves sideways is almost a corrective pattern for the stock market."
Economic data was mixed. Consumer sentiment rose in December to its highest level since June, and demand for long-lasting manufactured goods surged. First-time claims for jobless benefits edged down, but a rise in new home sales in November came in below expectations.

Dow Jones Industrial Average

 (DJI: ^DJI )
Index Value:11,573.49
Trade Time:4:01PM EST
Change:Up 14.00 (0.12%)
Prev Close:11,559.49
Open:11,559.11
Day's Range:11,542.62 -11,580.84
52wk Range:9,596.04 -11,615.60


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