Heavy Weight Week Ahead...
The first full week of every month are heavy weight weeks full of important economic numbers. For this week, we have the ISM index on Monday and the Jobs Report on Friday (see stock market calendar).
Investors are obviously looking ahead to better numbers again this time round. Consensus for ISM index is for a higher number of 46.5 and consensus for unemployment rate is for yet another higher number of 9.7%. Will beating these consensus result in a breakout? The technicals seem to suggest otherwise. Short term bullish momentum has been reducing steadily over the past week suggesting that the bulls may be slowing down and yielding to the bears. This continues to show that much of these good news has been priced in through the July rally so far. As such, a technical pullback seems inevitable this week as the Dow look set to test its 50days moving average in order to establish it as the long term support that it has always been for long term trends. For now, the Dow remains in all out bull trend.
Investors are obviously looking ahead to better numbers again this time round. Consensus for ISM index is for a higher number of 46.5 and consensus for unemployment rate is for yet another higher number of 9.7%. Will beating these consensus result in a breakout? The technicals seem to suggest otherwise. Short term bullish momentum has been reducing steadily over the past week suggesting that the bulls may be slowing down and yielding to the bears. This continues to show that much of these good news has been priced in through the July rally so far. As such, a technical pullback seems inevitable this week as the Dow look set to test its 50days moving average in order to establish it as the long term support that it has always been for long term trends. For now, the Dow remains in all out bull trend.
posted by Jason Ng at 5:28 PM
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