Stocks notched one of their best week’s in a year as it appears that Europe is getting closer to resolving their debt crisis. The Dow Jones Industrial Average (chart) closed the week up 4.7%, the Nasdaq (chart) +6.3%, the S&P 500 (chart) +5.4% and the Russell 2000 (chart) finished the week up 6%. What a performance for the bellwether indexes, especially the Nasdaq (chart).
In my last blog, I referred to the markets being “range bound” and that some type of catalyst would need to occur in order for the markets to “breakout” of its recent range. Based on the progress that the EU is making in solving their debt crisis, equities are now finding themselves at the upper end of their trading ranges. If a concrete resolution can come out of Europe, this may be just enough for the markets to breakout and resume its uptrend. However, should the debt and credit crisis continue in Europe, we could very easily trade within the range that has been established over the past month or so.
Let’s see if this 5-day winning streak we are on can continue next week and if indeed the key indicies can breakout to the upside. I will be paying close attention to the S&P 500 (chart) to see if it can break above the 1225 level with significant volume. In addition, my preferance would be to see multiple days of trading and closing above that mark in order for me to believe that the breakout is valid.
Enjoy the weekend 🙂