Monday Morning Market Review: 2007-10-08

Scoreboard

INDEX	10/5/07 CLOSE	ALL TIME HIGH	% CHANGE YTD	% CHANGE 52 WEEK
S&P 500	1557.59	1557.59 (10/5/07)	9.8%	15.4%
Dow Jones Industrial Average	14066.01	14087.55 (10/1/07)	12.9%	18.7%

INDEX	P/E TRAILING	P/E FORWARD	DIVIDEND YIELD
S&P 500	18.1	16.6	1.8%
Dow Jones Industrial Average	16.9	16.1	2.1%

Trend Analysis

Trend ***	S&P 500	DJIA
Primary (200 day MA)	Up	Up
Intermediate (50 day MA)	Up	Up
Short-term (10 day MA)	Up	Up

(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend

*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.

Richard Russell’s PTI

Russell’s PTI is Bullish

Facts & Interesting Tidbits

• The DJIA is up 9.5% from its mid-August low.
• The DJIA was up 1.2% for the week, its fourth straight weekly gain.
• The DJIA reached a new record close of 14087.55 on Monday.
• The DJIA hit a new intraday high of 14124.54 on Friday.
• The S&P 500 closed at a record high on Friday.
• Volatility has increased - between July 19 and late September, roughly half the trading sessions freatured swings in the S&P 500 of at least 1%. By contrast, in all of 2005 and 2006 combined there were less than 60 trading days in which prices moved more than 1%. (Source: Wall Street Journal)

The Bottom Line

Markets hit record highs last week as investors hope the worst is over. A positive employment report drove the market higher on Friday. The market continues its bullish trend. The Dow continues to lead the way as investors are favoring large multi-national businesses.

Monday Morning Market Review

Scoreboard

Trend Analysis

S&P 500
Primary Trend = UP
Intermediate Trend = UP
Short-term Trend = UP

NOTE: I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.

Richard Russell’s PTI = BULLISH

Facts & Interesting Items
· U.S. Stocks Have Biggest September Gain Since 1998 on Rate Cut
· The S&P 500 gained for the 5th straight quarter

The Bottom Line
The Fed helped stocks with a .50% rate cut in September. Since then, stocks have clearly been trending up. How will Q4 unfold? I only wish I knew! However, at the moment the market is clearly in a bullish trend and this market is favoring the large cap blue chip stocks. The DJIA is only 0.7% below its record close of 14000.41 set on July 19th. This should be an interesting week as we watch and see if the DJIA will break through and hold above the 14000 level.