Dead Cat Bounce Ends...
Fundamentals
What happens when expectations were not met by reality? Disappointment results and that was what happened in the market last week and is the overall theme of the stock market the past few weeks. Last Friday, the Consumer Sentiment Index slumped after a 3 months rally, making a 11 months low. This along with last Thursday's dramatic plunge in the Philley Fed woke investors up to a harsh reality, that the coming quarters might be harder than expected. As such, it is not strange for the stock market to revaluate the situation and take back some of those optimism through a period of consolidation like this one.
Technicals
The Dow ended its long dead cat bounce last Friday, turning down very nicely after hitting its daily 200MA and ended slightly below its daily 30MA. However, volume spiked on Friday suggesting a little too much panic which may lead to the market going sideways or pulling slightly over the next few days but as long as the Dow trades below its daily 50MA, I still think its a nice an strong intermediate bear trend in place. Immediate resistance zone would be about 10,400 and immediate support would be about 9700.
For now, the Dow remains in a short term bear trend, intermediate bear trend within a primary bull trend.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
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