- The Dow Is Near Resistance

Market Summary
Markets moved higher last week despite the continued concern of a possible recession. On Friday, the labor department announced that the economy suffered the biggest drop in employment since 2003. For many traders the rally was welcomed, but it may be too early to predict whether this momentum will be able to continue. As you can see from the chart below, the major indexes face strong overhead resistance. The chart of specific interest is of the Dow because it is retesting the resistance of the 12,700 level, which it has not been able to move above since the downtrend started. The other chart that we find particularly interesting is of the Russell because it is testing the resistance of its 50-day moving average. A bounce off this level could be used to predict a pullback in the broader markets.