Stock Market Analysis

Monday, August 09, 2010

Bull Trend Remains Intact

The Dow battled against the bears to take back deep intraday losses last Friday, closing yet another sideways day down a marginal 21 points.

Fundamentals
The US market continue to show resilience against lesser than ideal economic numbers last Friday as the Dow recovered from a deep intraday loss of over 150 points to close down only marginally by 21 points. Last Friday's jobs report was lesser than ideal because more nonfarm payrolls were lost than expected, sinking the market early in the day. However, the resilient bulls saved the day once again as a surge of late buying took the market all the way up towards the breakeven point, ending marginally lower. This is going to be a quiet week with no major economic data being released (see Stock Market Calendar) and a good time for investors to digest last week's numbers and what it means for the future.

Technicals
Volatility remains the theme of the market as once again we witnessed big intraday movements of over 150 points. There are no strong signs to doubt the new bull trend that is in place now even though the market remains in a short term overbought condition. Again, lets not forget that the Dow is used to trading in short term overbought condition for extended periods of time. Looking at the weekly chart, we can see that the Dow has completed a reversal and is once again trading on top of its weekly 30MA which once again is a bullish sign.

For now, the Dow remains in a short term bull trend, intermediate bull trend within a primary bull trend.




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

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