A Wait-and-See Market

In spite of the sudden swings in both directions immediately after the Federal Reserve's comments Wednesday, the result was nothing more than a continuation of what we have been noting recently. This market took a small hit with little volume last week, and that took the averages exactly to where support was expected. We can see that on the first chart below. The result is that we are now in a small sideways market rather than in the advance of the prior two weeks. It does not yet look like a significant downturn because of its small magnitude and lack of volume.

On the longer-term chart -- the second chart below -- it is clear that the drop, when put in context, is so small as to be quite uninformative. But the small advance of the last few days is similarly unimpressive. In the meantime, the indicators are still giving overbought readings. All this says that it is not the time to be buying, but there is not enough evidence to justify going short. It is a wait-and-see market....266 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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