Earnings Season Starts...
The Dow started the earnings season with a small profit taking day, correcting marginally by 5 points.
As expected, most of the earnings announced this first day of the earnings season were positive. However, that didn't stop investors from taking some profits off the table of these great stocks such as YUM as much of this expectation has already been priced into the 2 days rally the past two days. Even though there were traders selling into the better earnings, volume is extremely light, suggesting that such profit taking activity isn't widespread. Another piece of concern is tomorrow's jobless claims. After a dismal jobs report this month, investors certainly need a foothold to regain some footing. Consensus is for a much lower number of 540K. If it matches or beats, we can be sure of a smooth journey to the 10,000 points level.
A small low volume doji candle was formed today on the Dow suggesting inactivity due to digestion in the market. Digestion or "wait and see" usually occurs after strong rallies and the Dow already had a good 2 days rally. Short term bullish momentum continues to rise but is still far from being short term overbought. This gives the Dow plenty of room to upside, paving the way to the 10,000 points level as long as the 30MA holds.
For now, the Dow remains in short term neutral trend, intermediate term bull trend and primary bull trend.
As expected, most of the earnings announced this first day of the earnings season were positive. However, that didn't stop investors from taking some profits off the table of these great stocks such as YUM as much of this expectation has already been priced into the 2 days rally the past two days. Even though there were traders selling into the better earnings, volume is extremely light, suggesting that such profit taking activity isn't widespread. Another piece of concern is tomorrow's jobless claims. After a dismal jobs report this month, investors certainly need a foothold to regain some footing. Consensus is for a much lower number of 540K. If it matches or beats, we can be sure of a smooth journey to the 10,000 points level.
A small low volume doji candle was formed today on the Dow suggesting inactivity due to digestion in the market. Digestion or "wait and see" usually occurs after strong rallies and the Dow already had a good 2 days rally. Short term bullish momentum continues to rise but is still far from being short term overbought. This gives the Dow plenty of room to upside, paving the way to the 10,000 points level as long as the 30MA holds.
For now, the Dow remains in short term neutral trend, intermediate term bull trend and primary bull trend.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
posted by Jason Ng at 5:59 PM
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