Neutral Trend Continues...

The market closed mixed with the Nasdaq composite and the S&P500 ending positive and the Dow ending negative by a marginal 25 points.

Corporate earnings continue to be extremely weak but nothing out of the expectation of investors so far. Selling pressure in the market has also subdued tremendously compared to last year as the Dow went from short term overbought to short term oversold going down just slightly over 560 points when a similar overbought to oversold move back in November last year took the Dow down over 2000 points. In fact, the Dow continues to trade within its short term neutral channel of about 9000 to 8500 and from the way the after market futures are pointing towards, the Dow could turn back up continuing its short term and intermediate term neutral trend. In fact, this is the longest neutral trend since the 2008 crash began, demonstrating strong investor support. On the flip side, if these investors whom has held up for so long should be disappointed with a bearish breakout, the market could still go significantly lower as these guardians bailout as well. For now, the Dow continues to be in an intermediate and short term neutral trend within a primary bear trend with excellent long term support on its monthly 200MA.

Investors would focus on signs of economic recovery (although not very possible yet) in the retail sales and business inventories numbers tomorrow (see economic calendar). So how might investors react to a worse than expected retail sales number? I don't think there will be a strong effect or any at all. Historically, retail sales isn't one of those heavyweight market moving indicators such as ISM index especially with such a strong support in the market now. Investors hoping to gain no matter which way the market breaks out could explore Delta Neutral Trading.