Daily US Market Comments 04 Jan 2007 by MastersoEquity.com
FUNDAMENTALS
Markets disappointed traders in the Bull camp yesterday as what was building up to become a great way to start 2007, collasped mid day after the Feds raised concerns over the severity of the pullback in the housing sector. In fact, the Dow went from a high of 12580.03 to a low of 12405.14, a huge 174.89 points chasm in between! We usually see this kind of points difference on very pessimistic, negative days. Even though the Dow rebounded slightly to close 11 points up by the end of the day, it does not change the fact that a great amount of pessimism exist yesterday, the first trading day of 2007. All these while, the Feds has continuously fed (no pun intended.) investors with small doses of negative sentiments almost on a daily basis over housing and inflation concerns. It is almost like they are trying to prepare investors for "what is to come". Is the "soft landing" in the housing sector only an illusion? Is a coming recession cleverly disguised as trying to bring inflation down so as to prevent an all out panic? Only time will tell. Tis the season to be cautious...
TECHNICALS
Markets closed sideways yesterday, forming a huge spinning top candlestick formation. Such a formation indicates a strong sense of uncertainty, especially one with such long top and bottom wicks. Such a formation is more common in the Dow but is not something common in the NASDAQ composite index. This sense of uncertainty means that the markets can still go anywhere from this point forward with a slight bearish inclination. Crude Oil broke below its neutral $60 channel yesterday and is looking to trade lower.
Markets disappointed traders in the Bull camp yesterday as what was building up to become a great way to start 2007, collasped mid day after the Feds raised concerns over the severity of the pullback in the housing sector. In fact, the Dow went from a high of 12580.03 to a low of 12405.14, a huge 174.89 points chasm in between! We usually see this kind of points difference on very pessimistic, negative days. Even though the Dow rebounded slightly to close 11 points up by the end of the day, it does not change the fact that a great amount of pessimism exist yesterday, the first trading day of 2007. All these while, the Feds has continuously fed (no pun intended.) investors with small doses of negative sentiments almost on a daily basis over housing and inflation concerns. It is almost like they are trying to prepare investors for "what is to come". Is the "soft landing" in the housing sector only an illusion? Is a coming recession cleverly disguised as trying to bring inflation down so as to prevent an all out panic? Only time will tell. Tis the season to be cautious...
TECHNICALS
Markets closed sideways yesterday, forming a huge spinning top candlestick formation. Such a formation indicates a strong sense of uncertainty, especially one with such long top and bottom wicks. Such a formation is more common in the Dow but is not something common in the NASDAQ composite index. This sense of uncertainty means that the markets can still go anywhere from this point forward with a slight bearish inclination. Crude Oil broke below its neutral $60 channel yesterday and is looking to trade lower.
Labels: fundamental analysis, investment, share market, stock market, stocks, technical analysis
posted by Jason Ng at 8:21 PM
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