Dow Stages Monday Rally

Bulls beat the early bears today bringing the Dow up a solid 185 points led by Financials. In fact, today's action could spell the end of this technical pullback if it is followed up tomorrow and closes the Dow significantly above its 200 days moving average, which has been a strong resistance level so far.

It does seem like many of the fund sitting on the sidelines so far are getting optimistic and finds this technical pullback a delicious point of entry. This is also why we have seen so much strength in the Dow over the past couple of weeks. In the technical front, this rebound off the Dow's weekly 30MA is extremely important and could probably set it as a support level for the intermediate bull trend to continue, resulting in a bullish reversal. Again, this needs to be followed up on over the next few days.

The next few days are expected to still be volatile due to earnings season and the coming options expiration (see Stock Market Calendar). Investors would also be looking forward to more optimistic data in tomorrow's Business Inventories and the coming Empire State Index as well as Philley Fed. For now, the Dow remains in short term Neutral trend, Intermediate Bull trend and Primary Bear trend.