Fundamentals
The Dow gained 84 points today even though Durable Goods orders came in pretty dismal and jobless claims mostly inline with expectations. Indeed, it is
baffling to see the market being so strong all week under such weak short term fundamentals. In fact, today's move is supported by bond yields rising
across the board as investors rush back into the equities market. All in all it seems like bargain hunters have managed to convince investors to join
into the fray despite what is happening in the world and in the economy now.
Technicals
Yes, what happens in the world can sometimes be different from what investors and traders actually interpret and do. This is what makes technical analysis
so powerful, cutting through the noise and look at what investors and traders are actually doing. The Dow made a critical breakout today, rising and closing
above its 30MA. This puts the Dow back above its 50MA and 30MA and back into a short term bull trend. Short term bullish momentum is still rising and
the Dow is still not yet short term overbought. The Dow may have to test the 30MA a bit more over the next few days but nothing in the technicals suggest that
this isn't what it looks like, a reversal out of a short term correction the kind we saw back in November 2010.
For now, the Dow turns a short term bull trend, intermediate bull trend and primary bull trend.
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