Core PPI Matches Analysts Expectations

FUNDAMENTAL ANALYSIS
The Dow gained another 71.37 points today after core PPI matched analysts expectations, giving more signs of an abating inflation. The Producer Price Index (PPI) is a measure of the average level of prices of a fixed basket of goods received in primary markets by producers. The monthly PPI reports are widely followed as an indication of commodity inflation. The CPI numbers tomorrow is certainly more important than the PPI numbers as it reflects the change in prices at the consumer's end directly and is a much more important inflation indicator than the PPI. Stay tuned.

TECHNICAL ANALYSIS
We witnessed the first real bullish followup today since the correction started on 5 June. This follow up has allowed the Dow to rebound off its 30MA support line. However, it is still a little lacking in volume and doesn't make it a very strong rebound. Unless I see a strong hundred point candle tomorrow, or very soon, along with growing volume, I cannot convince myself that the Dow's staircase formation has resumed. However, our momentum indicators are definitely flashing a growing and steady bullish momentum and short term stochastics are also rising steadily. Both tells me that the bulls have definitely woke up on the Dow and is just awaiting the right moment to strike.