redback report. week ended 7/5/2010, page-20

This market has a lot of confidence behind it.

Look at a couple of the charts above.

The Advance/Decline Thrust Chart is going straight up. That sort of direct movement is usually seen only in down movements, not in up movements.

Similarly, the 5-Day Average of the Force Index has risen vertically - and is now above the Zero Line and above the 13-Day and 21-Day Moving Averages.

Those two charts provide a vote of confidence in this market.

Volume has been sound - without being outstanding.

Is the market over-sold?

The stocks from the 50-Leaders above the 10-Day Moving Average has just reached 50%. That's not oversold. Williams %R and RSI are a long way from being oversold.

Looking at the negatives. The 200-Day Moving Average lies overhead. That may provide resistance. Remember - resistance is just that - not a brick wall.

We can expect some hesitation here - some consolidation. Given the strength so far in this run-up, some consolidation can now be expected.

But - there is great confidence in this market from powerful forces. In the medium term, I think those forces will prevail.

In the short term, I think we'll have some hesitation.

We shall see. What I think is immaterial. Keep watching the market - and do your own research.