Stock Market Analysis

Thursday, January 21, 2010

Intermediate Pullback Begins...

The Dow continues its pullback today, closing down by 213 points, putting 2010 into the red in one fell sweep.

Yes, the US market isn't going to be fortunate enough to digest the grossly overbought sentiment by going sideways anymore. The Dow's follow up to downside today confirmed a short term bear trend and looks strong enough to lead into an intermediate bear trend. This is in spite of a much stronger than expected leading indicators released today. Yes, we have been missing an intermediate pullback like this one since July 2009. Bond yields continue to drop across the board and the VXO made the biggest upwards move in a long while today, confirming the rise in fear in the market (see Bond Yield Curve and VXO chart).

On the technical front, the Dow broke its 30 and 50MA in one fell sweep, which confirms that this isn't going to be just a short term bear trend. Short term support would be at the 10,000 points level. I doubt it break the 10,000 points though.

For now, the Dow turned short term bear trend in an intermediate neutral trend and primary bull trend.

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


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