The Dow dropped 162 points today as global markets sold off once again on macro uncertainty.
Fundamentals
Investors sold off globally today as results coming out of the Euro summit over the weekend failed to please investors in a big way. Investors rushed back for the safety of bonds, depressing bond yields significantly. Traders also rushed back for put options for the first time in weeks, taking total equities put call ratio above par in favor of put options trading. Indeed, worry in the Eurozone is once again taking over the market with the fading memory of much better than expected US economic data released in the first week. Once again, the market is going to ebb and flow with news from the Eurozone, at least for this week, creating a volatile trading week.
Technicals
The Dow continued its super congestion between the 12,200 and 12,000 points level today. The Dow has been trading largely within this region for the past 8 sessions with the last 3 sessions touching both the upper and lower limit intraday. Once again, the 12,200 points level proved itself to be an extremely strong resistance level. If the Dow fail at the 12,200 points level once again, it will complete an intermediate double top formation with support at around the 11,200 points area once again.
For now, the Dow turns a short term neutral trend within an intermediate neutral trend and primary bull trend.
Dow Gains Despite Weaker Sales
The Dow closed higher by 52 points today despite poorer than expected sales data.
Fundamentals
Sales data turned in largely worse than expected today, putting pressure on a market that has just found some momentum from last week's slew of better than expected data. However, that didn't stop investors from continuing their return back to equities as bond yields continue to rise and options traders continue to trade in favor of call options in a pattern that is predominant during largely bullish markets. All of these continue to give the market a largely optimistic sentiment despite obvious volatility. The next big number to look forward to would be Thursday's Jobless Claims.
Technicals
The Dow is once again right at the 12,200 points resistance with obvious selling pressure throughout the day, taking the Dow off the 12,200 point level itself. With the Dow in short term overbought condition, we may see yet more struggling around this area before it muster enough energy for a breakout but odds now favor a topside breakout in continuation of the volatile bull trend.
For now, the Dow turns a short term bull trend within an intermediate neutral trend and primary bull trend.
Fundamentals
Sales data turned in largely worse than expected today, putting pressure on a market that has just found some momentum from last week's slew of better than expected data. However, that didn't stop investors from continuing their return back to equities as bond yields continue to rise and options traders continue to trade in favor of call options in a pattern that is predominant during largely bullish markets. All of these continue to give the market a largely optimistic sentiment despite obvious volatility. The next big number to look forward to would be Thursday's Jobless Claims.
Technicals
The Dow is once again right at the 12,200 points resistance with obvious selling pressure throughout the day, taking the Dow off the 12,200 point level itself. With the Dow in short term overbought condition, we may see yet more struggling around this area before it muster enough energy for a breakout but odds now favor a topside breakout in continuation of the volatile bull trend.
For now, the Dow turns a short term bull trend within an intermediate neutral trend and primary bull trend.
Dow Made 7% Week...
What a week is was last week as US economic data turned in consistently stronger than expected, giving the market a much needed boost. In fact, the Dow made a huge 7% run last week on a week-on-week basis, which is totally phenomenal. This took the Dow once again to the doorway of the 12,200 points resistance zone, which it failed to break last month after multiple testing, in a slightly short term overbought condition. With a quiet week ahead, we might see the market succumb to a bit of selling pressure like we saw last Thursday and Friday before it muster the kind of strength needed for a topside breakout. The Dow looks very much set in a volatile uptrend with huge ups and downs, pushing each peak slowly upwards until perhaps a resolution of the Eurozone issues. Investors definitely ran back into the safety of bonds last Friday, depressing bond yields across the board but trader sentiments continue to be more positive than negative as total equities put call ratio remained below par for 5 straight days, something which we have not seen since the July correction. All in all, I do see a topside breakout coming up, perhaps next week?
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