The Dow retreats 78 points despite better than expected economic data.
Fundamentals
Both Jobless Claims and Leading Indicators turned in better than expected today, continuing the jobs recovery scenario laid down by this month's better than expected Jobs Report. However, market begun trading in the red and continued in the red throughout the session on lousy showing in the global markets prior to US market opening. Even though it was a negative day in the market, we did not see the kind of all out exodus back into bonds by investors as bond yields only dropped a tad across the board. This is perhaps due to the continued better economic numbers which should lead to better showing in the stock market really soon and investors really don't want to miss out on that. Options traders, however, are more pessimistic as they once again took total equities put call ratio above par in favor of put options trading.
Technicals
As expected and as mentioned in my email to paid subscribers yesterday, the Dow continued to test the 13,000 points for support. The positive thing at the 13,000 points level now is the fact that the 30MA is also around the area and the Dow is now once again sitting on top of its 30MA, which is a strong short term bullish support, and would have a good chance of rebounding from this area into new highs especially with the Dow now in short term oversold condition after three straight down days.
For now, the Dow remains in short term neutral trend, intermediate bull trend and primary bull trend.
