Welcome back from the Memorial Day long weekend! The Dow retreated 0.56% last week on a week on week basis as economic data continues to turn in worse than expected.
Even though it was a net negative week last week, the market was still a strong one as it bottomed out and reversed on last Monday's drop. Even though the Dow is still trading within the trading range of last Monday's drop, the strength it found around its daily 50MA is extremely encouraging and do result in more upside than downside possibility. However, on the short term, the Dow still needs to get atop the 30MA before it can safely make new highs.
This is a holiday shortened week but still a heavy weight one as it is the first week of June. As such, we will be getting the ISM index on Wednesday and Jobs report on Friday (see Stock Market Calendar). Inline with most of the leading indicators that were released, analysts are expecting a lower ISM index and nonfarm payroll which can result in some volatility this week. Indeed, the US market is in a volatile uptrend now and continued volatility is to be expected.
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Market Holding Against Disappointing Data
The Dow moved sideways closing marginally higher by 8 points today as both GDP and Jobless Claims disappoints.
Fundamentals
As I have expected, GDP turned in worse than expected today at 1.8% versus 2.1% consensus. Yes, the poorer than expected result was largely predicted by all the leading indicators so far and by the lower ISM index earlier this month. The much higher than expected Jobless claims was a surprise as analysts were expecting a lower number this time. Jobless claims turned in 424K versus consensus of 404K. All these data were released before market opened today and led to a deeply red opening. However, technical bargain hunters stepped in shortly after and brought the market back up into the green.
Technicals
Even though it is just a sideways day today, the strength displayed at this critical support level does reinforce confidence in the continuation of the current intermediate bull trend. However, we would expect light trading and probably some volatility tomorrow ahead of the long weekend. If you are in stocks, make sure you protect some of your positions using the Protective Put options strategy.
For now, the Dow remains in a short term bear trend, intermediate bull trend and primary bull trend.
My Market Analysis Sent Straight Into Your Email Daily For Only $5/Month! **My analysis will only be posted here once every other day.
Fundamentals
As I have expected, GDP turned in worse than expected today at 1.8% versus 2.1% consensus. Yes, the poorer than expected result was largely predicted by all the leading indicators so far and by the lower ISM index earlier this month. The much higher than expected Jobless claims was a surprise as analysts were expecting a lower number this time. Jobless claims turned in 424K versus consensus of 404K. All these data were released before market opened today and led to a deeply red opening. However, technical bargain hunters stepped in shortly after and brought the market back up into the green.
Technicals
Even though it is just a sideways day today, the strength displayed at this critical support level does reinforce confidence in the continuation of the current intermediate bull trend. However, we would expect light trading and probably some volatility tomorrow ahead of the long weekend. If you are in stocks, make sure you protect some of your positions using the Protective Put options strategy.
For now, the Dow remains in a short term bear trend, intermediate bull trend and primary bull trend.
My Market Analysis Sent Straight Into Your Email Daily For Only $5/Month! **My analysis will only be posted here once every other day.
Market Down Despite Better Sales
The Dow declined by 25 points today despite better than expected sales data and new home sales.
Fundamentals
Better than expected sales data and new home sales gave the market an optimistic start this morning. However, this quickly gave way to a heavy and steep sell off following the new home sales release which brought the market to a low it never recovered from for the rest of the day. There are no strong fundamental reasons to explain the sudden ditch except for the possibility that some institutions are strategically "Selling in May and trying to Go Away" during this final week of May.
Technicals
Even though today's drop was somewhat discouraging and points towards weakening sentiments in the market, it really traded within yesterday's trading range which makes today more of a sideways day rather than a negative one. Even though the Dow closed below its critical 50MA today, it was insignificantly so and it would be more prudent to wait one more day for a clear signal.
For now, the Dow turns a short term bear trend, intermediate bull trend and primary bull trend.
My Market Analysis Sent Straight Into Your Email Daily For Only $5/Month! **My analysis will only be posted here once every other day.
Fundamentals
Better than expected sales data and new home sales gave the market an optimistic start this morning. However, this quickly gave way to a heavy and steep sell off following the new home sales release which brought the market to a low it never recovered from for the rest of the day. There are no strong fundamental reasons to explain the sudden ditch except for the possibility that some institutions are strategically "Selling in May and trying to Go Away" during this final week of May.
Technicals
Even though today's drop was somewhat discouraging and points towards weakening sentiments in the market, it really traded within yesterday's trading range which makes today more of a sideways day rather than a negative one. Even though the Dow closed below its critical 50MA today, it was insignificantly so and it would be more prudent to wait one more day for a clear signal.
For now, the Dow turns a short term bear trend, intermediate bull trend and primary bull trend.
My Market Analysis Sent Straight Into Your Email Daily For Only $5/Month! **My analysis will only be posted here once every other day.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
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