Daily US Market Comments 09 Jan 2007 by MastersoEquity.com
Cautiousness Surrounds Coming Earnings Season. Stocks Up Marginally.
FUNDAMENTALS
Markets closed marginally higher yesterday on cautiousness surrounging the coming earnings season. Earning seasons officially starts today and nobody really knows what to expect. The market could definitely benefit from a good earnings season but a cooller than expected earnings season could be the catalyst needed to put the market down into a bear trend from its current shaky position high up on the fence. On the brighter side of things, the Feds remarked that the housing sector is coming to a soft landing with limited ill effects and that inflation seems to be easing. This means that whatever has been done to rescue the economy continues to show up positively. Only one question remains, when will the Feds cut interest rates?
TECHNICALS
Markets closed sideways yesterday. Such marginal gains are not to be considered a gain in context of a technical chart pattern. The Dow continues to form a lower low and a lower high for a 3rd straight day, making this sideways close a slightly bearish one. The Dow has also been trading right on top of its 30 days moving average and that has proved to be an important support level for the Dow throughout this rally. As long as this level is not breached, the Dow will continue to be in a short term neutral trend supported by a long term up trend, which still makes it a bullish market. The Nasdaq Composite formed another spinning top candlestick formation yesterday. Such a formation shouts one word, "Uncertainty". The bulls and bears each won half of the day, eventually to close almost where it started in a tie. Another concern here is that short term momentum indicators has almost moved the whole length up for the Nasdaq composite so far but we have not yet seen a significant move upwards in the index. This shows that there is a strong resistance level here wearing out the buying momentum. Indeed, as we can see, the Nasdaq composite has been failing at the 2450 level over the past few days. Overall, this is still a very mixed market with plenty of indications to support both a bullish and bearish outlook. Traders are advised to continue to be cautious at this point.
FUNDAMENTALS
Markets closed marginally higher yesterday on cautiousness surrounging the coming earnings season. Earning seasons officially starts today and nobody really knows what to expect. The market could definitely benefit from a good earnings season but a cooller than expected earnings season could be the catalyst needed to put the market down into a bear trend from its current shaky position high up on the fence. On the brighter side of things, the Feds remarked that the housing sector is coming to a soft landing with limited ill effects and that inflation seems to be easing. This means that whatever has been done to rescue the economy continues to show up positively. Only one question remains, when will the Feds cut interest rates?
TECHNICALS
Markets closed sideways yesterday. Such marginal gains are not to be considered a gain in context of a technical chart pattern. The Dow continues to form a lower low and a lower high for a 3rd straight day, making this sideways close a slightly bearish one. The Dow has also been trading right on top of its 30 days moving average and that has proved to be an important support level for the Dow throughout this rally. As long as this level is not breached, the Dow will continue to be in a short term neutral trend supported by a long term up trend, which still makes it a bullish market. The Nasdaq Composite formed another spinning top candlestick formation yesterday. Such a formation shouts one word, "Uncertainty". The bulls and bears each won half of the day, eventually to close almost where it started in a tie. Another concern here is that short term momentum indicators has almost moved the whole length up for the Nasdaq composite so far but we have not yet seen a significant move upwards in the index. This shows that there is a strong resistance level here wearing out the buying momentum. Indeed, as we can see, the Nasdaq composite has been failing at the 2450 level over the past few days. Overall, this is still a very mixed market with plenty of indications to support both a bullish and bearish outlook. Traders are advised to continue to be cautious at this point.
Labels: fundamental analysis, investment, share market, stock market, stocks, technical analysis
posted by Jason Ng at 7:21 PM
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