Double Bottom — UPDATE

Friday, August 19, 2011

The exhibits below, from “Double Bottom? This Powerful, Positive Indicator Could Be Forming,” have been updated through Friday’s close.

In the graph, note that the S&P 500 Stock Index, while down, held the low closing level set last week.

In the table, note that Friday’s moves expanded to eight (from three) the number of DJIA stocks that closed below last week’s low closes. Four were industrial companies (Alcoa, Caterpillar, DuPont and MMM), and four were technology firms (IBM, Intel, Microsoft and Hewlett-Packard). The other twenty-two stocks held their lows, with some well above those levels. Noteworthy are previously beaten down Bank of America (up 7.1%) and Cisco Systems (up 9.8%).

Updating the other companies mentioned in the previous article, Google was 10.1% below its previous low close, Amazon was 7.6% below and Apple was 0.8% above.

The bottom line

Friday’s stock market action was in line with the creation of a double bottom. The next two week’s actions leading up to Labor Day should confirm whether this is a foundation or not.

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