Chicago PMI Beats Expectations...
The Dow gained marginally by 35 points today as the Chicago PMI beat expectations.
The Chicago PMI (Purchasing Manager's Index) turned in better than expected today at 56.1 vs consensus of 53. Readings above 50 suggest an expanding economy while readings below 50 suggest a contracting economy. What today's 56.1 tells us is that the US economy has stepped out of recession and is expanding at an accelerating pace. Tomorrow's ISM index would be the real heavyweight indicator of how the economy is doing. So far, the ISM index has recovered to almost pre-recession levels. Investors should be prepared for some volatility.
So far this month, the Dow has been trading largely sideways. I speculated that it will retreat back to its 30MA before moving higher but it seems like it prefers to wait for its 30MA to catch up on it instead. Still, we need to see the Dow break out of its current range before any short term trading is possible.
For now, the Dow has turned short term neutral trend within an intermediate and long term bull trend.
The Chicago PMI (Purchasing Manager's Index) turned in better than expected today at 56.1 vs consensus of 53. Readings above 50 suggest an expanding economy while readings below 50 suggest a contracting economy. What today's 56.1 tells us is that the US economy has stepped out of recession and is expanding at an accelerating pace. Tomorrow's ISM index would be the real heavyweight indicator of how the economy is doing. So far, the ISM index has recovered to almost pre-recession levels. Investors should be prepared for some volatility.
So far this month, the Dow has been trading largely sideways. I speculated that it will retreat back to its 30MA before moving higher but it seems like it prefers to wait for its 30MA to catch up on it instead. Still, we need to see the Dow break out of its current range before any short term trading is possible.
For now, the Dow has turned short term neutral trend within an intermediate and long term bull trend.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
posted by Jason Ng at 5:30 PM
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