Heavy Weight Week Ahead...

WELCOME BACK FROM THE LOOOOOOOONG WEEKEND!

Well, the first week of every month is always a heavy weight week because that's when the most influential of all economic indicators are released; the ISM index and Jobs Report (See economic calendar)! The ISM number have managed to remain slightly above water (the 50 mark) and above concensus for a couple of months now and the real question is, would it surprise us tomorrow? Uncertainty regarding this outlook seemed to be reflected in the totally dismal trading volume last week as investors sit on the sidelines. From the looks of it, those big investment institutes out there don't have a clue what to do either. Yes, analysis is never 100%... they know it too.

August have been a pretty quiet month with a monthly trading volume at the lowest that we have seen since 2004. Net change to the Dow was only up 1.45% in a largely sideways month. Just as peak trading volume always seem to signal trend changes, dismal trading volume does too and over the years, dismal trading volume seem to occur near bottoms. Does this mean the bottom for the market is near? Does it mean that we have already seen the bottom in July? Nobody can be sure enough and that is why everyone, including professionals, are largely on the sidelines. For now, one thing is sure; The Dow continues to be in a short term neutral trend, looking for a breakout and if my analysis above is anything to go by, the inclination may be to upside.

Time to put on a risk limited Bull Call Spread?