Daily US Markets Comments 31 July 2006 by MastersoEquity.com
FUNDAMENTALS
The US markets had a slight boost last week from falling oil prices and the decreasing likelihood of another rate hike on the next Fed meeting on 3 Aug. The crisis in the middle east continues but let's not start to view the US markets as controlled by the middle east conflict... it is NOT. The impact on the middle east conflict is primarily on oil as far as the US markets is concerned for now. These impact would have been analysed and reflected in the daily oil prices by the markets. That is why the primary concern for fundamental traders should be just the oil prices and not how the middle east conflict is developing. There are so many variables affecting oil prices that it is insufficient and inaccurate to just keep your eyes on the middle east.
TECHNICALS
The US markets continue its broadbased move up as oil prices continue to fall. Looking at both the NASDAQ Composite index and the Dow, tells us that these two trading days are critical to where the market might head towards for perhaps an intermediate trend. We see NASDAQ at the top of the downwards channel that it has so faithfully been in for the last 2 months. If it should fail at this level, we might see NASDAQ moving into new lows. Looking at the Dow shows us that it is also at the top of its sideways price channel. If it fails to break decisively to downside, we might see it correcting back down to continue its sideways trend. So, indeed, these 2 days will be critical, so let us watch in eager anticipation.
The US markets had a slight boost last week from falling oil prices and the decreasing likelihood of another rate hike on the next Fed meeting on 3 Aug. The crisis in the middle east continues but let's not start to view the US markets as controlled by the middle east conflict... it is NOT. The impact on the middle east conflict is primarily on oil as far as the US markets is concerned for now. These impact would have been analysed and reflected in the daily oil prices by the markets. That is why the primary concern for fundamental traders should be just the oil prices and not how the middle east conflict is developing. There are so many variables affecting oil prices that it is insufficient and inaccurate to just keep your eyes on the middle east.
TECHNICALS
The US markets continue its broadbased move up as oil prices continue to fall. Looking at both the NASDAQ Composite index and the Dow, tells us that these two trading days are critical to where the market might head towards for perhaps an intermediate trend. We see NASDAQ at the top of the downwards channel that it has so faithfully been in for the last 2 months. If it should fail at this level, we might see NASDAQ moving into new lows. Looking at the Dow shows us that it is also at the top of its sideways price channel. If it fails to break decisively to downside, we might see it correcting back down to continue its sideways trend. So, indeed, these 2 days will be critical, so let us watch in eager anticipation.
posted by Jason Ng at 9:29 PM
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