Not A Bad Day for the Dow
The Dow ended the day lower by 40 points as the less than encouraging tone in the Beige book caused some disappointment and sell-offs.
The Dow started off on an extremely strong note as investors accumulate into the intermediate term support level. However, the enthusiasm died off in the afternoon as the language in the Beige Book release (see Stock Market Calendar) brought us all back to reality. Yes, reality is that the US economy's path to recovery is going to be slow and tough. In fact, the recovery around the world is going to be slow and tough (except, it seems, for China) as it is going to take time and pain to unwind out of the credit issues that have been accumulated over the decade. Lets also hope that Europe comes up with ways to stop the domino effect from getting any worse.
As a trader, we cannot predict nor stop world events from happening, as such, we keep our focus on interpreting what's going on and how to profit from it.
The market action today is an extremely encouraging one on an intermediate time frame. The Dow bounced off the low made on 25 May, which is the final gate stopping the bears from running amok, and made a higher high and a higher low today, which is definitely a bullish sign even if the day ended negative. If the Dow follows up to upside today, we could see a short term ride to the top of this short term neutral channel at about 10,250. Yes, volatility is the name of the game now and definitely a good time for quick and nimble day trading as we saw today.
For now, the Dow remains in a short term neutral trend, intermediate bear trend and a primary bull trend.
The Dow started off on an extremely strong note as investors accumulate into the intermediate term support level. However, the enthusiasm died off in the afternoon as the language in the Beige Book release (see Stock Market Calendar) brought us all back to reality. Yes, reality is that the US economy's path to recovery is going to be slow and tough. In fact, the recovery around the world is going to be slow and tough (except, it seems, for China) as it is going to take time and pain to unwind out of the credit issues that have been accumulated over the decade. Lets also hope that Europe comes up with ways to stop the domino effect from getting any worse.
As a trader, we cannot predict nor stop world events from happening, as such, we keep our focus on interpreting what's going on and how to profit from it.
The market action today is an extremely encouraging one on an intermediate time frame. The Dow bounced off the low made on 25 May, which is the final gate stopping the bears from running amok, and made a higher high and a higher low today, which is definitely a bullish sign even if the day ended negative. If the Dow follows up to upside today, we could see a short term ride to the top of this short term neutral channel at about 10,250. Yes, volatility is the name of the game now and definitely a good time for quick and nimble day trading as we saw today.
For now, the Dow remains in a short term neutral trend, intermediate bear trend and a primary bull trend.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
posted by Jason Ng at 12:30 AM
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