The Dow gained 112 points today on better than expected economic data.
Fundamentals
US market celebrated a much better than expected Jobless Claims and Consumer Comfort Index, getting off to a strong start, beat short term profit taking in the morning session to close higher. Jobless Claims unexpectedly made its lowest level since April, dropping to 390K from last week's revised number of 400K. Investors cheered to the news and reallocated strongly back from bonds as bond yields rose significantly across the board. However, general trader's sentiment still seems slightly negative as there was obviously short term selling into the strength and total equities put call ratio persisted above par in favor of put options trading. An above par total equities put call ratio always tells me that the market is still generally uncertain or bearish and can expect to meet all kinds of resistance, which we have witnessed so far. The US market is also caught in a wedge between bad news from Europe and good news on the economic data front with every positive data giving rise to a positive day and then something in Europe taking all that gains away soon. Indeed, until the European issue reaches a firm resolution, the market will not find a committed direction.
Technicals
Indeed, the Dow is literally caught in a "Wedge" formation right now. A Wedge formation is created when prices go sideways in a narrowing channel. The Dow is clearly caught in a wedge between the rising 30DMA and the 12,000 points level right now. Such formations suggest uncertainty in the market which we all know comes largely from the European side. However, the good thing is that such a "Wedge" or "Pennant" formation occurring along a rising price trend usually breaks out in the direction of its previous trend, which is upwards in this case, when the uncertainties get resolved. As long as the 30DMA level holds up, the short term bull trend isn't in much of a danger.
For now, the Dow remains in a short term bull trend, intermediate neutral trend and primary bull trend.
Dow Rallies on European News
The Dow continued to struggle today on last Friday's disappointing Jobs Report but still managed to eke out a gain of 85 points by the end of the day.
Fundamentals
It was a largely negative day in the US market today as investors continue to exit on the poorer than expected Jobs Report last Friday. Bond yields continue to drop today as investors continue to move for safe harbors. However, the weakness didn't last long before investors and traders bought into news from Europe in the afternoon, bringing the market back into the black. Total equities put call ratio declined significantly as put options trading declined against call options trading as options traders reduce their hedges and downside speculation today. Indeed, every development in the European debt issue affects US stock markets almost instantaneously and it seems like it is going to take a major development to really trigger off a sustained rally here.
Technicals
Traders continue to buy into the reversal today on weakness, providing support once again around the 19,000 points area. However, volume was missing from today's market, making today's gain a pretty weak one. Good news is, nothing that happened over the past two trading days changed the reversal pattern. In fact, as long as the bull starts running again, we would be good to call an intermediate bull trend. The Dow is still in a healthy reversal pattern coming out of the volatile neutral trend and still very much set for a new bull leg.
For now, the Dow remains in a short term bull trend within an intermediate neutral trend and primary bull trend.
Fundamentals
It was a largely negative day in the US market today as investors continue to exit on the poorer than expected Jobs Report last Friday. Bond yields continue to drop today as investors continue to move for safe harbors. However, the weakness didn't last long before investors and traders bought into news from Europe in the afternoon, bringing the market back into the black. Total equities put call ratio declined significantly as put options trading declined against call options trading as options traders reduce their hedges and downside speculation today. Indeed, every development in the European debt issue affects US stock markets almost instantaneously and it seems like it is going to take a major development to really trigger off a sustained rally here.
Technicals
Traders continue to buy into the reversal today on weakness, providing support once again around the 19,000 points area. However, volume was missing from today's market, making today's gain a pretty weak one. Good news is, nothing that happened over the past two trading days changed the reversal pattern. In fact, as long as the bull starts running again, we would be good to call an intermediate bull trend. The Dow is still in a healthy reversal pattern coming out of the volatile neutral trend and still very much set for a new bull leg.
For now, the Dow remains in a short term bull trend within an intermediate neutral trend and primary bull trend.
Dow Meets Support
The Dow gains 178 points today as the market accumulates from the steep 2 days drop.
Fundamentals
The Dow gained on relatively thin trading today as ADP employment beat expectations, casting some optimism on Friday'r Jobs Report. Fed chairman's speech after 2pm also gave the market a little bit of a boost into the close. Even though it was a pretty big gain in the Dow today, investors didn't quite pour into the market the way they should on really strong days. Trading volume was light and bond yields rose insignificantly across the board suggesting that investors aren't reallocating back into equities much. In fact, options traders continue to keep total equities put call ratio above par in favor of put options trading. All in all, it was a really cautious rally today without much real enthusiasm. Indeed, analysts are expecting a worse Jobs Report on Friday and that kind of uncertainty surely cannot result in clear cut optimism just days before its release.
Technicals
Today's rally is mainly technical in nature as some traders accumulate around the 11,600 level, which was the seemingly unbreakable resistance level of the neutral channel of Aug to Oct. In fact, accumulation around this area can be a substitute for retesting the 30DMA for reversal confirmation, as long as it follows up tomorrow. So far, this new bull trend still looks set and remains healthy as long as the Dow remains above its 30DMA.
For now, the Dow remains in a short term bull trend, intermediate neutral trend within a primary bull trend.
Fundamentals
The Dow gained on relatively thin trading today as ADP employment beat expectations, casting some optimism on Friday'r Jobs Report. Fed chairman's speech after 2pm also gave the market a little bit of a boost into the close. Even though it was a pretty big gain in the Dow today, investors didn't quite pour into the market the way they should on really strong days. Trading volume was light and bond yields rose insignificantly across the board suggesting that investors aren't reallocating back into equities much. In fact, options traders continue to keep total equities put call ratio above par in favor of put options trading. All in all, it was a really cautious rally today without much real enthusiasm. Indeed, analysts are expecting a worse Jobs Report on Friday and that kind of uncertainty surely cannot result in clear cut optimism just days before its release.
Technicals
Today's rally is mainly technical in nature as some traders accumulate around the 11,600 level, which was the seemingly unbreakable resistance level of the neutral channel of Aug to Oct. In fact, accumulation around this area can be a substitute for retesting the 30DMA for reversal confirmation, as long as it follows up tomorrow. So far, this new bull trend still looks set and remains healthy as long as the Dow remains above its 30DMA.
For now, the Dow remains in a short term bull trend, intermediate neutral trend within a primary bull trend.
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