Awaiting the Critical Rebound
The Dow pulled back 148 points today as Existing home sales deeply disappoints.
What was an optimistic start for the market today reversed sharply after Existing Home Sales missed estimates by a mile (see Stock Market Calendar). The mixed store sales data did very little to combat the deeply disappointing housing data and with the FOMC announcement coming up tomorrow, investors were traditionally cautious even though the Fed isn't expected to change rates anytime soon. However, we are not surprised at all with the pullback.
Like I said in the beginning of the week, the Dow needs to pullback and retest the 30 days moving average and establish it as a support in order for the bull trend to resume and to complete a reversal of this intermediate neutral trend. The magnitude of today's pullback is strong but with weak volume which does not give it much strength. As such, I would expect the Dow to rebound as soon as tomorrow. The quality of the rebound is going to be extremely important and with a good follow up on Friday, the reversal will be completed.
For now, the Dow remains in a short term bull trend, intermediate neutral trend within a primary bull trend.
What was an optimistic start for the market today reversed sharply after Existing Home Sales missed estimates by a mile (see Stock Market Calendar). The mixed store sales data did very little to combat the deeply disappointing housing data and with the FOMC announcement coming up tomorrow, investors were traditionally cautious even though the Fed isn't expected to change rates anytime soon. However, we are not surprised at all with the pullback.
Like I said in the beginning of the week, the Dow needs to pullback and retest the 30 days moving average and establish it as a support in order for the bull trend to resume and to complete a reversal of this intermediate neutral trend. The magnitude of today's pullback is strong but with weak volume which does not give it much strength. As such, I would expect the Dow to rebound as soon as tomorrow. The quality of the rebound is going to be extremely important and with a good follow up on Friday, the reversal will be completed.
For now, the Dow remains in a short term bull trend, intermediate neutral trend within a primary bull trend.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
posted by Jason Ng at 9:55 PM
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