The Dow Gains Again On Favorable PPI

The Dow is up again today by a marginal 20.57 points as early optimism due to a favorable PPI met with fierce profit taking towards the end of the day. The total PPI dropped for the first time since January, indicating a retreat in food and energy prices. This is definitely a great news especially with the FOMC release just round the corner. However, looking at the Dow technical chart, we see that the rally is indeed weakening over the days with smaller and smaller candles being formed. The huge surge in volume today also failed to bring the Dow significantly higher, indicating a possible short term ceiling. I see the 14000 level as a significant resistance level and a retreat from this level is not only acceptable but a welcomed move as the Dow is indeed somewhat short term overbought.