I hope you are all enjoying a safe and restful Thanksgiving weekend. I certainly am so the newsletter is fairly short today.

The NASDAQ Composite is in a symmetrical triangle pattern. This means that the resistance line is descending while the support line is rising, at approximately equal rates. The probable outcomes from this pattern are equally weighted to the upside and downside, so we must wait for a breakout above the resistance trend or below the support trend on heavy volume before we can know the outcome. That said, I think the probabilities are that we will continue to move higher consistent with our trend model, and the rising 50 and 200 day moving averages. Also, the NASDAQ Composite and Russell 2000, from where the majority of successful breakouts come, are not weighed down by banking stocks and other large cap companies that will suffer from a downturn in the global outlook. This is evident in the NASDAQ and Russell 2000 being positive for the week while the larger cap indexes went south. All bets are off, however, if  there's a flare up on the Korean Peninsular or Portugal and then Spain require a bailout.



On the domestic front, though, things are looking brighter. Third quarter GDP was revised upwards to 2.5% annual from 2.0% (its still anemic but the trend is in the right direction), new jobless claims fell sharply, consumers earned more, spent more, and saved more in October and consumer confidence is improving. Unfortunately, the housing market is still deteriorating and durable goods orders also declined.


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