Valentine's Day Present From Uncle Ben...
FUNDAMENTAL ANALYSIS
Markets continued its bullishness today as Fed Chairman Bernanke (Uncle Ben) took the bench and painted a rosy picture for all investors to lavish on. Here are some market moving quotes:
"inflation pressures are beginning to diminish."
"likely to foster sustainable economic growth and a gradual ebbing of core inflation."
"Overall, the U.S. economy seems likely to expand at a moderate pace this year and next, with growth strengthening somewhat as the drag from housing diminishes,"
Uncle Ben sounded extremely optimistic and is a great contrast from what we have heard from the Feds so far... this makes the intent highly suspicious. Well, no matter what the intent may be, this is exactly the kind of things investors love to hear from a man like Uncle Ben... no matter if it be true or not. This, along with a drop in oil price due to healthy oil inventories, helped to push the Dow to yet another historical high. There will be more heavy weight economic release along the week which should either give emphasis or diminish what Uncle Ben just said. Realistically, we should not be getting a rate cut anytime soon as core inflation numbers are just beginning to go down. I seriously don't think the Feds will start to make any adjustments when their efforts has just begun to show up.
Technical Analysis
The Dow is at new highs! Did it come as a surprise to you? Certainly not to me. Here's my quote from yesterday:
"If the pattern holds, we should see a new high by tomorrow."
And indeed, we see the Dow at new highs today, beautifully and faithfully completing yet another step in its staircase formation. It is also interesting to note how nice economic news seems to tie in nicely with every step that is formed in the Dow chart. The Nasdaq composite has been faithfully neutral for a few days and have been off my focus for a while, today, the Nasdaq composite made a comeback at last to challenge the 2500 resistance level. The last time the Nasdaq composite made a trip this high up, it is already in the deep overbought condition. This made it very difficult to have any energy left to break a resistance level. This time round, the Nasdaq composite is still a mile from being overbought and with growing upside momentum on growing volume, it looks like it just might make it this time round. A high volume break above the 2500 level with a nice follow up will bring Nasdaq out of its current neutral trend into a short term up trend. As for the Dow, it is almost certain to see it start to go sideways again tomorrow or the day after. So far, both indices has stayed true to their patterns and my sentiments remain Bullish for the Dow and Neutral for Nasdaq.
COMPQX Technical Chart By Worden Brothers TC2007 Charting Software
Voted Best Software By Readers Of Stocks & Commodity Magazine Since 1993!
"Best Option Trading Books Recommended By Fund Manager!"
Markets continued its bullishness today as Fed Chairman Bernanke (Uncle Ben) took the bench and painted a rosy picture for all investors to lavish on. Here are some market moving quotes:
"inflation pressures are beginning to diminish."
"likely to foster sustainable economic growth and a gradual ebbing of core inflation."
"Overall, the U.S. economy seems likely to expand at a moderate pace this year and next, with growth strengthening somewhat as the drag from housing diminishes,"
Uncle Ben sounded extremely optimistic and is a great contrast from what we have heard from the Feds so far... this makes the intent highly suspicious. Well, no matter what the intent may be, this is exactly the kind of things investors love to hear from a man like Uncle Ben... no matter if it be true or not. This, along with a drop in oil price due to healthy oil inventories, helped to push the Dow to yet another historical high. There will be more heavy weight economic release along the week which should either give emphasis or diminish what Uncle Ben just said. Realistically, we should not be getting a rate cut anytime soon as core inflation numbers are just beginning to go down. I seriously don't think the Feds will start to make any adjustments when their efforts has just begun to show up.
Technical Analysis
The Dow is at new highs! Did it come as a surprise to you? Certainly not to me. Here's my quote from yesterday:
"If the pattern holds, we should see a new high by tomorrow."
And indeed, we see the Dow at new highs today, beautifully and faithfully completing yet another step in its staircase formation. It is also interesting to note how nice economic news seems to tie in nicely with every step that is formed in the Dow chart. The Nasdaq composite has been faithfully neutral for a few days and have been off my focus for a while, today, the Nasdaq composite made a comeback at last to challenge the 2500 resistance level. The last time the Nasdaq composite made a trip this high up, it is already in the deep overbought condition. This made it very difficult to have any energy left to break a resistance level. This time round, the Nasdaq composite is still a mile from being overbought and with growing upside momentum on growing volume, it looks like it just might make it this time round. A high volume break above the 2500 level with a nice follow up will bring Nasdaq out of its current neutral trend into a short term up trend. As for the Dow, it is almost certain to see it start to go sideways again tomorrow or the day after. So far, both indices has stayed true to their patterns and my sentiments remain Bullish for the Dow and Neutral for Nasdaq.
COMPQX Technical Chart By Worden Brothers TC2007 Charting Software
Voted Best Software By Readers Of Stocks & Commodity Magazine Since 1993!
"Best Option Trading Books Recommended By Fund Manager!"
Labels: dow, fomc, fundamental analysis, fundamentals, investment, oil prices, share market, stock market, stocks, technical analysis, technicals, us market, usa
posted by Jason Ng at 5:40 PM
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