The Dow broke out of the 9500 resistance zone today, closing up 56 points to end at 9720 points, making a new high for the year.
Fundamentals
Early profit takers were quickly beaten back as investors digest the optimistic Empire State Index which continued to point towards US economic recovery (See Stock Market Calendar). The Empire State Index, also known as the Empire State Manufacturing Survey, is a monthly survey of manufacturers in the New York area and measures their current and forward looking sentiments. This is an important forward looking indicator which the Fed watches very closely. In fact, the Empire State Index has been in positive territory for 2 consecutive months so far and rising steadily. There is no doubt from these numbers that the economic recovery is underway. What really bugs traders is how much of these are already priced into the stock market?
Technicals
The Dow's breakout today is an important one and on good rising volume. It also helped my Star Trading System make a new 53% profit on CNX today. It wasn't the strong kind of breakout that we are used to but a continuation of its gradual rise much like the morning sun. In fact, the Dow is once again at a new high for the year, putting it less than 400 points from the 10,000 points mark, which is expected to be a strong resistance level. So far, the bull trend has been slow, gradual and a little weak but rising steadily along a rising 30 days moving average nonetheless. Today's move also took the Dow into short term overbought condition, so don't be surprised to see a retest of the 9500 level soon. Yes, a retest is necessary to establish it as the new support level, giving investors the confidence to push the Dow even higher.
For now, the Dow remains in all out bull trend.
Fundamentals
Early profit takers were quickly beaten back as investors digest the optimistic Empire State Index which continued to point towards US economic recovery (See Stock Market Calendar). The Empire State Index, also known as the Empire State Manufacturing Survey, is a monthly survey of manufacturers in the New York area and measures their current and forward looking sentiments. This is an important forward looking indicator which the Fed watches very closely. In fact, the Empire State Index has been in positive territory for 2 consecutive months so far and rising steadily. There is no doubt from these numbers that the economic recovery is underway. What really bugs traders is how much of these are already priced into the stock market?
Technicals
The Dow's breakout today is an important one and on good rising volume. It also helped my Star Trading System make a new 53% profit on CNX today. It wasn't the strong kind of breakout that we are used to but a continuation of its gradual rise much like the morning sun. In fact, the Dow is once again at a new high for the year, putting it less than 400 points from the 10,000 points mark, which is expected to be a strong resistance level. So far, the bull trend has been slow, gradual and a little weak but rising steadily along a rising 30 days moving average nonetheless. Today's move also took the Dow into short term overbought condition, so don't be surprised to see a retest of the 9500 level soon. Yes, a retest is necessary to establish it as the new support level, giving investors the confidence to push the Dow even higher.
For now, the Dow remains in all out bull trend.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
posted by Jason Ng at 6:26 PM
0 Comments:
Post a Comment
<< Home