To Breakout or Not To Breakout...

This is going to be decision week for the US stock market, especially for the Nasdaq composite, whether to end one of the longest neutral trend in US market history, or to pullback and continue with it. All major indices are now at the top of their short term neutral trend channels as the peak unemployment reversal speculators poured in on last Friday's 7.6% unemployment rate. Bond traders also joined in the fray as bond yields rose across the board. If this follows up strongly tomorrow, breaking the short term neutral channel, the Dow would go into a short term bull trend and head for the top of its intermediate neutral channel at about 9000 points.

This week's mover is going to be the economic stimulus plan and investors need to decide what it really means to them. Investors would also focus on the jobless claims this Thursday for signs of stabilization (see economic calendar).