More Good News... Little Gains...

FUNDAMENTAL ANALYSIS
The Dow closed sideways today at 13671.92 after a day of huge intraday swings. Market opened weaker when the unemployment claims report turned in higher than expectation. Unemployment claim report has always been a strong market mover but it was suddenly reversed by a historically less important report, the existing home sales report. Existing home sales picked up in September due to bargain hunting in the foreclosure market, adding points to the possibility that the housing market might have found a bottom at last.

The existing home sales report is a monthly report released by the National Association Of Realtors. It is not a historically important report as existing home sales do not directly correlate nor is indicative of short run GDP performance. However, this report has picked up weight lately due to the housing market slump and the credit crunch. As the outlook sours in the housing market, buyers tend to stay on the sidelines, watching for the "best time to buy". If buying picks up and persists, it could be indicative that a bottom has been found at last. So, I would say we need a couple of months more to confirm this... that's how things are in the Real Estate market... things just don't move as fast as the stock market.

TECHNICAL ANALYSIS
Volume continues to climb, a higher high and a higher low is made, all indicative of bullish undercurrent. However, one element is lacking... a strong positive close. The Dow is again at a dangerously important juncture. If volume continues to climb without significant advances, the Dow may still succumb to selling pressure as buyers are exhausted without significant gains. From the looks of it, the decision needs to be made today if the buyers or sellers would make the next trend. If we do not see a significant gain today, we need to be prepared for the worst.


Dow Technical Chart By Best Charting Software TC2007!