Stock Market Analysis

Thursday, August 05, 2010

Cautiousness Ahead of Jobs Report

The Dow moved sideways today, pulling back a marginal 5.45 points ahead of tomorrow's Jobs Report.

Fundamentals
The Dow held its ground today in the face of higher than expected jobless claims but with extremely thin trading volume. Apparently investors are apprehensive about tomorrow's jobs report and the few those are still in the market are secretly optimistic from the way they held the market against the jobless claims numbers, probably due to the positive ADP report earlier this week. How the jobs report will turn out is everyone's guess. However, it does seem from the resilience so far that a better than expected jobs report might help the Dow break out of its current 10,680 top for greater heights while a lousier than expected number could probably not cause much panic as we have seen how strongly the market has held up against poor economic numbers so far.

Technicals
So, its a sideways day today with the Dow still in short term overbought condition. However, like I always said, lets not forget the Dow is used to trading upwards under short term overbought conditions. So far, the short term bearish divergence that we have identified last week has not proven to be a threat to this new intermediate bull trend. There is now no strong reason to doubt that the market is once again in an all out bull trend, unless the daily 200MA fails to hold prices up.

For now, the Dow turns 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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