Stock Market Analysis

Sunday, November 29, 2009

Heavy Weight Week Again...

Welcome back! Hope you had a great Thanksgiving weekend!

One reason why professionals like myself are reluctant to put on new positions prior to long weekends is because anything can happen over so many days. That was what happened this time time with the Dubai credit crisis. Dubai's sovereign fund requested for a suspension of debts just a few hours after issuing their new bonds in a move that tells the whole world that they have overspent like a lady in a Prada shop. Stock markets drop all over the world in fear of a new "financial crisis" arising out of this event. The Dow also dropped by 154 points in last Friday's half day trading.

Seriously, the Dubai incident isn't a big deal for two reasons; Firstly, not every country in the world are invested in Dubai in a big way. Secondly, its a debt suspension, not yet a debt default. In fact, the Dow is going to retreat down to retest the 10,000 points level again as I have mentioned before and it might as well have been on the back of an event such as this one. The Dow has been secretly wearing off most of its short term overbought condition last week over the weak trading volume which leads me to think that a retreat may be only down to the 30 MA instead of all the way down to the 10,000 level. Either way, the direction is still upwards for now on the intermediate and long term basis and I don't see anything that threatens it.

This is the first week of December and yes, a heavyweight week in terms of economic numbers (see Stock Market Calendar). Once again, we will get the ISM index and the Jobs Report this week which will certainly have much more impact than the Dubai incident.

For now, the Dow remains in a all out bull trend.




Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!

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