More Signs of Economic Recovery...

The Dow rebounded slightly off its critical 30days moving average support today by 58 points as more optimistic economic data hit the wire.

Better than expected Philly Fed, leading Indicators and jobless claims (see stock market calendar) supported the Dow from breaking below its critical 30 days moving average today. However, investors are cautious ahead of tomorrow's quadruple witching day as well as the weekend ahead and did not jump in on the data. In fact, trading volume remained mediocre today.

The Dow is now at the crossing point between its 200 days moving average, which has been the resistance level the past week, and its 30 days moving average, which provides support. Looking back, we can see that the crossing of the 30 and 200 days moving average is an important event as it usually signifies the beginning of a new trend. The question now really is, will it do so? I pretty much doubt we will have a satisfactory answer this week as tomorrow is arbitrage day (quadruple witching). Nonetheless, the future never looked this bright going forward and the long term outlook remains optimistic. For now, the Dow remains in short term neutral trend, intermediate term bull trend and long term bear trend.