A Rocky Week Ahead

Welcome back from the Memorial Day Long Weekend!

Well, all real traders appreciate long breaks and only losers hate long breaks. :)

The Dow ended the week last week as the first negative week since the rally begun in April. Looking at the weekly charts, the Dow is down a slight 49.25 points last week... not a lot, but enough to indicate weakness at such mid term overbought levels. The Dow's mid term technical indicators are also showing a teeing off of upside momentum and an entry into mid term overbought. However, the Dow is all used to rallying in the overbought region, so all these may still mean nothing. What is going to be critical is, this is going to be a week full of very important economic releases like the FOMC release and the GDP (please see http://www.mastersoequity.com/option_trader_hq.php for a free weekly economic calendar) and is expected to be a week of high volatility.

One negative week definitely do not tell any tale but another negative week certainly will. Tomorrow is likely to be a pretty calm day as it always had been before every FOMC releases... will it be the calm before the storm?