Dow Breaks Out!
The Dow staged a breakout of the 11,140 points short term price ceiling last Friday, closing up by 70 points at 11,204.
Last Friday's gain came on the back of great housing numbers last week with both existing home sales and new home sales turning in stronger than expected. The housing market has been in the duldrums for way too long and a recovery in this sector would definitely be beneficial to the overall economic recovery.
On the technical front, there is nothing much to doubt this breakout as it has good volume and form. However, don't be surprised to see a few sideways or slightly negative days before it continues upwards. Traders also need to be nimble to react to a possible intermediate term pullback like the one we saw back in January. with the market this extended without any significant pullbacks along the way, we can expect the next pullback to be a strong one.
This week is FOMC week where the Feds meet to decide the financial fate of America (and the world?). The Feds will be announcing their decision on Wednesday (see Stock Market Calendar) and are expected to keep rates steady. So yes, if they raise target this time round, investors will be caught off guard and we will see that big pullback I talked about. However, that is merely a distant possibility right now.
For now, the Dow resumes an all out bull trend.
Last Friday's gain came on the back of great housing numbers last week with both existing home sales and new home sales turning in stronger than expected. The housing market has been in the duldrums for way too long and a recovery in this sector would definitely be beneficial to the overall economic recovery.
On the technical front, there is nothing much to doubt this breakout as it has good volume and form. However, don't be surprised to see a few sideways or slightly negative days before it continues upwards. Traders also need to be nimble to react to a possible intermediate term pullback like the one we saw back in January. with the market this extended without any significant pullbacks along the way, we can expect the next pullback to be a strong one.
This week is FOMC week where the Feds meet to decide the financial fate of America (and the world?). The Feds will be announcing their decision on Wednesday (see Stock Market Calendar) and are expected to keep rates steady. So yes, if they raise target this time round, investors will be caught off guard and we will see that big pullback I talked about. However, that is merely a distant possibility right now.
For now, the Dow resumes an all out bull trend.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
posted by Jason Ng at 7:38 PM
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