Dow Gains on BTE Leading Indicators

Dow gained 104 points today on better than expected Leading Indicators, pointing the way to economic recovery. Leading indicators beat consensus of 0.5 today, turning in 0.7, which continues to point towards slow economi recovery in Q3.

Investors started out with a bit of profit taking when the number was released before catching on with the optimism and started buying again. However, its a relatively thinly traded day today as trading volume continues to be below average with the sense of the Dow being short term overbought.

Yes, the Dow may look like it broke out of the 8750 resistance level but it really hadn't. It is still within the influence of the 8750 resistance zone and such a low volume with short term momentum this overbought does not make it a sound breakout at all. In fact, we could see a pullback as soon as tomorrow onwards or at least a recognisable short term sideways trend. This also means the point where bulls could start to watch for a good deal entry. For now, the Dow remains in short term Bull trend, Intermediate term Neutral trend and primary bear trend.