Bulls Vs Bears -- Tie

FUNDAMENTAL ANALYSIS
Stocks ended almost exactly where it closed the day before on Friday. We saw increased level of participation from the market as both the bulls and the bears jumped in on the good news and bad news of the day. On the good news end, we have increased consumer spending and a retreating oil price. On the bad news end, we have rising core PCE which means rising inflation again and therefore a rising possbility of another rate hike. Both the bulls and bears ended in a tie in a spectacular day of wide intraday range. These days, fundamental analysis for short term movements are really about sentiment analysis of towards daily news. It seems from Friday's stock market action, there are a proportionate number of bulls and bears in the markets torn apart by the ton of releases pointing both ways with no concensus yet. Until we see some form of market concensus, this market remains to be a range traded one.

TECHNICAL ANALYSIS
Friday's market action was quite a surprise to me as I didn't expect to see such a fierce battle for supremacy between the bulls and bears today. The Dow closed sideways in a huge doji on rising volume. This shows that the bulls and bears are still locked in battle. How the next day opens following such a signal would usually tell which side won the battle and the direction which the day will close. So, how Monday would close would very much depend on how it opens. If it opens higher, it will likely to trade and close higher. If it opens lower, it will likely to trade and close lower. With downside momentum still in existence and short term stochastics still a distance from being oversold, my take remains that the bears might win this round and find support at the 12100 level.


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