9.5% Unemployment Rate
The Dow closed down 223 points ahead of the independance day long weekend as unemployment rate in the US turned in a better than expected 9.5%.
Eventhough the consensus for unemployment rate was 9.6%, a 9.5% number is still higher than last month. That, along with higher than expected loss of payroll jobs of 467,000 and the long weekend ahead was all the reasons investors need to sell out today in order to protect against an uncertain long weekend (see Stock Market Calendar).
On the technical front, the Dow failed right at its 30 days moving average short term resistance level to go back into the pullback scenario. Even though trading volume was low today, the steady short term bearish momentum did make a good follow up on the weekly evening star formed 2 weeks ago. Ever since the weekly evening star formation was formed 2 weeks ago on the Dow, it has fallen a total of about 274 points in a steady march towards its short term support level of 8000 points. Yes, as I have mentioned whole week long, this is an important pullback because how low it goes determines if this is a reversal or a continuation pattern. With the strong economic outlook right now, chances are that this is a reversal but as technicians, we would want to see that evidence show up on the charts rather than to speculate it.
Have a great long weekend!
Eventhough the consensus for unemployment rate was 9.6%, a 9.5% number is still higher than last month. That, along with higher than expected loss of payroll jobs of 467,000 and the long weekend ahead was all the reasons investors need to sell out today in order to protect against an uncertain long weekend (see Stock Market Calendar).
On the technical front, the Dow failed right at its 30 days moving average short term resistance level to go back into the pullback scenario. Even though trading volume was low today, the steady short term bearish momentum did make a good follow up on the weekly evening star formed 2 weeks ago. Ever since the weekly evening star formation was formed 2 weeks ago on the Dow, it has fallen a total of about 274 points in a steady march towards its short term support level of 8000 points. Yes, as I have mentioned whole week long, this is an important pullback because how low it goes determines if this is a reversal or a continuation pattern. With the strong economic outlook right now, chances are that this is a reversal but as technicians, we would want to see that evidence show up on the charts rather than to speculate it.
Have a great long weekend!
posted by Jason Ng at 6:48 PM
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