Index up date May 2 2010

The small cap weekly index continued to perform very well until this week when it hit some resistance and fell a little over 3% on the week. Considering how far it has run this is not a bad retracement for a weekly chart. The down days that occurred since February look more like consolidation days rather than distribution days. Tuesday and Friday's activity had more negative tones to it in terms of advance decilne ratio's.

This index is still above its 25, 50, and 200 day MA's. Its trend continues intact although we expect continued distribution near this topping area just under the trendline and then consolidation before regaining its directional bias.

The Russell continues to trade above its 25,50, and 200 day MA and broke above its trendline on the weekly chart approx. 2 months ago and climbed steadily higher showing exceptional strength for smaller cap companies. Reflecting optimisim in growth stocks in general.

The NASDAQ ran into resistance at its trendline in the past several weeks and the daily is currently setting on top of its 25 day MA. The 2500 level has been associated with support and resistance levels back in 2007 and 2008. I would expect continued weakness and consolidation in this area before expressing its dirictional bias again. There have been 3 or 4 down days with price conviction in the past several weeks. Suggesting the market wants to correct some.

If further news of government difficulties occurs in Europe or elsewhere it would probably portend a 5-10% correction giving some of the very long bulls an opportunity to take some profits without feeling as though they might miss something. Other than European debt woes or something similar the markets have remained somewhat resiliant to bad news.

The Dow and S&P 500 larger caps have been performing poorer than their smaller cap cousins and have like the NAZ been hitting their recent trendlines and finding some resistance to going higher. Both are trading attheir 25 day MA currently and the S&P is still near the high of its trend channel. I anticipate continued weakness and consolidation in the near term. WIth interest rates still low and no other major governmental factors such as defaults occurring I think we will continue to move higher after a breather. There are some modest technical indications the Biggies may perform slightly better near term than their small cap cousins though.