Techs To The Rescue!

FUNDAMENTAL ANALYSIS
The Dow closed marginally down by 3.9 points today in a spectacular recovery off it's intraday low of -75.41 points today! Early profit taking has forced the Dow to open down and dive straight down below the 13300 point level, just when all hopes seems lost and that a full scale correction is at hand, a recovery in oil price to above $62 helped stage a small rally in the Technology sector which helped to liven sentiments across the board and lifted the Dow steadily throughout the day. This slight pullback also ended the Dow's 5 days rally ahead of tomorrow's FOMC release. The uncertainty that surrounds tomorrow's Fed release also explains why so many investors are taking profits today. Let's monitor how the sentiments go tomorrow. All in all, the numbers so far suggests that inflation continue to be in control and I would certainly expect the Fed to keep rates steady and to "continue monitoring".

TECHNICAL ANALYSIS
The Dow closed sideways today inline with it's staircase formation. Nothing seems out of sorts today and that some profit taking is normal at such levels. We saw the same "hangman" signal back on 19 April, which led on to another step in the staircase formation. There is only one concern though, that our momentum indicator shows a slight drop in bullish momentum. Such a drop makes a "hangman" signal very strong. I would make the 13210 points my final ultimatum on the Dow before I start going delta neutral and prepare for a correction.


Technical Chart By Worden Brothers TC2007 Charting Software
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