One More Step to Breakout
The Dow made its fifth straight up day today, closing up another encouraging 80 points as jobless claims fell more than expected.
Fundamentals
Jobless claims beat expectation of 565K, turning in only 550K today, reassuring investors that the job market isn't going to turn sour all of a sudden again. Indeed, investors have been jittery over the fact that jobless claims has not made a new low for months. Indeed, there is still a long way from the pre-market-crisis level of below 350K. However, there is no doubt that the economy recovery is now underway and that it take time to translate into jobs in the real economy. By then, the stock market would have priced it all in. Indeed, let's never forget that the stock market is a discounting mechanism that discounts to present value the expected future earnings and performance of all the companies in the market. It certainly isn't a day to day reflection of the real economy.
Technicals
On the technical front, the Dow continued its gains with rising bullish momentum and rising volume, which is extremely encouraging. It is now just one step away from making a clean breakout from the 9500 resistance zone and if it does, it will get into the short term overbought region and probably retest the 9500 level, establishing it as a new support level before moving on to the much anticipated 10,000 level. For now, the Dow does look good for a clean breakout tomorrow even though Friday trading tends to be a little sluggish.
For now, the Dow remains in all out bull trend.
Fundamentals
Jobless claims beat expectation of 565K, turning in only 550K today, reassuring investors that the job market isn't going to turn sour all of a sudden again. Indeed, investors have been jittery over the fact that jobless claims has not made a new low for months. Indeed, there is still a long way from the pre-market-crisis level of below 350K. However, there is no doubt that the economy recovery is now underway and that it take time to translate into jobs in the real economy. By then, the stock market would have priced it all in. Indeed, let's never forget that the stock market is a discounting mechanism that discounts to present value the expected future earnings and performance of all the companies in the market. It certainly isn't a day to day reflection of the real economy.
Technicals
On the technical front, the Dow continued its gains with rising bullish momentum and rising volume, which is extremely encouraging. It is now just one step away from making a clean breakout from the 9500 resistance zone and if it does, it will get into the short term overbought region and probably retest the 9500 level, establishing it as a new support level before moving on to the much anticipated 10,000 level. For now, the Dow does look good for a clean breakout tomorrow even though Friday trading tends to be a little sluggish.
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 6:55 PM
0 Comments:
Post a Comment
<< Home