Daily US Market Comments 22 Aug 2006 by MastersoEquity.com

FUNDAMENTALS
Markets ended its 5 days rally on the sudden rise in oil prices due to an escalation in the Iranian crisis. The drop is not a broadbased definite one and with the Iranian crisis being a long term one, it is hard to judge if the rally could truly end at these levels.

TECHNICALS
Oil prices rebounded from its deep oversold position as we have predicted. It is a rebound that is largely expected as we have seen a similar rebound both in May and June this year. Markets were down as it loses upwards momentum but were in reality sideways when looking at the overall trend. With the markets at short term overbought condition and short term resistance levels, it is almost compulsory for this little pullback to happen so that the markets can wear off some of the overbought sentiments. As long as the lows of 4 days ago hold its ground, I would say there will be more upside to come.


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