The Start Of Another Rally?

FUNDAMENTAL ANALYSIS
The Dow closed an inch higher by 38.29 points today as optimism surrounds the start of the second earnings season for the year. Bond yield and crude price pulling back slightly also helped to fuel some optimism in the market. In fact, with a week like this, having little heavy weight economic releases, a 38.29 points increase already sounds pretty reasonable as volume continues to be way below average. This earnings season is expected to be a positive one, mirroring the gradual pick up of the US economy. So, let's cross our fingers as they unfold.

TECHNICAL ANALYSIS
The Dow is now right at the top of the sideways channel and a few points from a new historical high. Volume is weak as participation in the move continues to be unconvincing. Unless it does a surprisingly strong breakout to upside tomorrow, the Dow will simply correct back into the sideways channel while the weekly 30MA continues to close in. It is not likely for the Dow to stage a sustained rally with the weekly 30MA so far below it. It is time to be cautious.


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