The Bull Rampage Starts In The US Markets!
FUNDAMENTALS
Markets continue to storm ahead yesterday with the Dow making yet another historical high and the Nasdaq composite making a new 6 years high! Slight profit taking was witnessed early in the first trading hour, leaving profit takers deep in regret as the markets rallied for the rest of the day.
Great December retail sales due to the holiday seasons (the biggest gain since July 2006) added fuel to the optimism that are already in the markets. The numbers showed that consumers are still able and willing to spend money and that is a sign of a healthy economy. Oil also showed more weakness as it fell to a low of $52 intraday with OPEC announcing that they will not be convening an emergency meeting as yet.
With the bull already out of the gates, retail sales up, oil price down and no signs of any action to lift oil prices, we can only imagine how far this bull can go.
Apple drops for a second consecutive day as a barrage of negative news pertaining to CEO Steve Job hit the markets. Well, that's probably why the Chinese Proverb says, "When the tree grows big, it catches more wind". Nothing yet about its lawsuit with CISCO. The big event for AAPL is its earnings release next Wednesday. We will be staying tuned.
TECHNICALS
Markets closed higher again yesterday with definite signs of a developing bull trend.
The Dow resumed its staircase like formation of moving up, retreating a little and moving up. This is definitely another moving up phase supported agin by its 30 days simple moving average. Back at 9, 10 and 11 Jan 2007, we saw a nice bounce off its 30 days simple moving average as well as another instance back at 27 Nov 2006 to 4 Dec 2006. This shows yet again that as long as the 30 days simple moving average holds, the Dow will continue to move up. With momentum indicators showing an increased momentum to upside and short term stochastics still a little distance from being overbought, it is safe to say that the Dow wil continue its bullishness next week.
The Nasdaq Composite completed its neutral channel break on 11 Jan 07 and followed up with another strong up day yesterday. Yesterday's move completed a classic channel break with strong volume, definitely an unmistakable bull sign. With momentum indicators increasing to upside and short term stochastics slightly in the overbought region, the Nasdaq composite still looks bullish. The Nasdaq Composite also formed a "Shaven Head" candlestick signal, which means that it closed right at the high of the day. This is an extremely bullish candlestick signal that signals that the next trading day is most likely going to be bullish too. Nasdaq's near 2 months neutral trend also showed us that its 30 and 50 days simple moving average are like the 2 security gates in a high security facility. Even if it breaks the first security gate (30 day simple moving average), the second security gate (50 days simple moving average) will stop its decline dead in its tracks and bounce it right back up.
Overall, the all major indices are bullish right now and it a good time to put on some longs or to go long on the indices.
Markets continue to storm ahead yesterday with the Dow making yet another historical high and the Nasdaq composite making a new 6 years high! Slight profit taking was witnessed early in the first trading hour, leaving profit takers deep in regret as the markets rallied for the rest of the day.
Great December retail sales due to the holiday seasons (the biggest gain since July 2006) added fuel to the optimism that are already in the markets. The numbers showed that consumers are still able and willing to spend money and that is a sign of a healthy economy. Oil also showed more weakness as it fell to a low of $52 intraday with OPEC announcing that they will not be convening an emergency meeting as yet.
With the bull already out of the gates, retail sales up, oil price down and no signs of any action to lift oil prices, we can only imagine how far this bull can go.
Apple drops for a second consecutive day as a barrage of negative news pertaining to CEO Steve Job hit the markets. Well, that's probably why the Chinese Proverb says, "When the tree grows big, it catches more wind". Nothing yet about its lawsuit with CISCO. The big event for AAPL is its earnings release next Wednesday. We will be staying tuned.
TECHNICALS
Markets closed higher again yesterday with definite signs of a developing bull trend.
The Dow resumed its staircase like formation of moving up, retreating a little and moving up. This is definitely another moving up phase supported agin by its 30 days simple moving average. Back at 9, 10 and 11 Jan 2007, we saw a nice bounce off its 30 days simple moving average as well as another instance back at 27 Nov 2006 to 4 Dec 2006. This shows yet again that as long as the 30 days simple moving average holds, the Dow will continue to move up. With momentum indicators showing an increased momentum to upside and short term stochastics still a little distance from being overbought, it is safe to say that the Dow wil continue its bullishness next week.
The Nasdaq Composite completed its neutral channel break on 11 Jan 07 and followed up with another strong up day yesterday. Yesterday's move completed a classic channel break with strong volume, definitely an unmistakable bull sign. With momentum indicators increasing to upside and short term stochastics slightly in the overbought region, the Nasdaq composite still looks bullish. The Nasdaq Composite also formed a "Shaven Head" candlestick signal, which means that it closed right at the high of the day. This is an extremely bullish candlestick signal that signals that the next trading day is most likely going to be bullish too. Nasdaq's near 2 months neutral trend also showed us that its 30 and 50 days simple moving average are like the 2 security gates in a high security facility. Even if it breaks the first security gate (30 day simple moving average), the second security gate (50 days simple moving average) will stop its decline dead in its tracks and bounce it right back up.
Overall, the all major indices are bullish right now and it a good time to put on some longs or to go long on the indices.
Labels: fundamental analysis, investment, share market, stock market, stocks, technical analysis
posted by Jason Ng at 8:25 PM
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