Bullishness Returns As Oil Quakes! Dow At Historical High!
FUNDAMENTALS
Crude oil price continued to drop yesterday by more than $1! The Dow closed a new historical high as bullishness returns. Crude oil has been dropping by about $1 every day since 3 Jan and gave the markets a new lease of life and a strong reason to be optimistic about. To augment this optimism, weekly jobless claim also fell larger than expected, indicating a growing economy. Earning releases yesterday were also surprisingly good. Good news seems to be flooding the markets right now and is a sure sign that the bull is back and the bear is out of the window. Cisco & Apple continues their court room drama as Cisco demands Apple to pay Cisco's legal fees and relinquish all profits eventually made on the iPhone. Cisco also demands Apple destroy all labels, signs, packaging and other promotional material that includes the word "iPhone," a product it cost Apple millions to develop. Apple closed down 1.24% yesterday. I will be following this closely.
TECHNICALS
The bulls has definitely returned as all major indices broke their resistance levels to close new highs. Undoubtedly, this rally is still the result of a dropping oil price. Since July 2006, the market has moved in the exact inverse of oil price; Market rallied when oil price dropped starting from 17 July 2006. Then went into a neutral trend when oil stalemated for a month from 4 Dec 2006, finally, spurring the market into a new bull trend with its recent decline from 4 Jan 2007. So, I am comfortable to say that as long as oil continues to drop, this rally would have more upside to go. The Dow is showing a lot of potential to upside as it curls up from a short term oversold position. Nasdaq followed up on the resistance level break yesterday and closed up significantly higher. The sky is the limit now for both indices and I will be monitoring their upwards momentum daily for any indications of weakness.
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Crude oil price continued to drop yesterday by more than $1! The Dow closed a new historical high as bullishness returns. Crude oil has been dropping by about $1 every day since 3 Jan and gave the markets a new lease of life and a strong reason to be optimistic about. To augment this optimism, weekly jobless claim also fell larger than expected, indicating a growing economy. Earning releases yesterday were also surprisingly good. Good news seems to be flooding the markets right now and is a sure sign that the bull is back and the bear is out of the window. Cisco & Apple continues their court room drama as Cisco demands Apple to pay Cisco's legal fees and relinquish all profits eventually made on the iPhone. Cisco also demands Apple destroy all labels, signs, packaging and other promotional material that includes the word "iPhone," a product it cost Apple millions to develop. Apple closed down 1.24% yesterday. I will be following this closely.
TECHNICALS
The bulls has definitely returned as all major indices broke their resistance levels to close new highs. Undoubtedly, this rally is still the result of a dropping oil price. Since July 2006, the market has moved in the exact inverse of oil price; Market rallied when oil price dropped starting from 17 July 2006. Then went into a neutral trend when oil stalemated for a month from 4 Dec 2006, finally, spurring the market into a new bull trend with its recent decline from 4 Jan 2007. So, I am comfortable to say that as long as oil continues to drop, this rally would have more upside to go. The Dow is showing a lot of potential to upside as it curls up from a short term oversold position. Nasdaq followed up on the resistance level break yesterday and closed up significantly higher. The sky is the limit now for both indices and I will be monitoring their upwards momentum daily for any indications of weakness.
Best Option Trading Books!
Labels: fundamental analysis, investment, share market, stock market, stocks, technical analysis
posted by Jason Ng at 6:37 PM
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