Dow Breaks From Sideways Trading...

FUNDAMENTAL ANALYSIS
The Dow gained 99.50 points today in a nice attempt to break out of 5 days of sideways trading. Many analysts attributed today's small rally to the GM and Bear Stearns news. However, if the good news is this localised to just 2 companies, why did the market stage a broad based gain instead of just a small gain based on the mega gains of just 2 companies (and their associates)? From what I noticed, the market continued to be bullish due to more and more reasons assuring investors that more rate cuts are coming our way. The recent bout of bad economic data not only failed to bring the Dow down, but eventually resulted in a small rally today! This shows that investors are optimistic and expecting something... another rate cut next month?

TECHNICAL ANALYSIS
The Dow broke out of sideways trading today and good thing it is to upside. However, the bad news is, this move is made on declining volume, didn't manage to reach a significant height, and prevented the Dow from digesting more of the short term overbought sentiment prior to challenging the all time high level. This is going to make it EXTREME difficult for the Dow to make a break. This is time again to be extremely cautious.


Dow Technical Chart By Best Charting Software, TC2007!