Sell-off Day...

The Dow sold off by 87 points today as the Empire State Index turned in worse than expected (see stock market calendar).

The Empire State Manufacturing Index, or commonly known as the Empire State Index, is a monthly survey of manufacturers in the New York area. Survey covers past conditions as well as future expectations. Now, the Empire State index, like most other index, is volatile and does not go straight up or down. Even though it failed to go higher this time round, it is still higher than the last lower number two months ago, which still indicates a rising trend. This is definitely a positive. On top of that, future expectations are really positive in the report as well.

What the Dow did was a healthy pullback to its 30 days moving average, which has been the support for this intermediate term rally so far. Over the past three months, the Dow has bounced off its 30 days moving average for new monthly highs. Will it do so again? The answer will only be revealed tomorrow. If it follows up to downside tomorrow, breaking the 30 days moving average, the big pullback every analyst have been waiting for would start.