Stock Market Analysis

Tuesday, August 10, 2010

Market Survives FOMC

The Dow rebounded from deep intraday losses after the Fed kept interest rate targets unchanged, closing slightly down by 54 points.

The Feds decided to keep interest rates unchanged at 0% to 0.25% even though they have been talking about the possibility of lowering it all the way to 0% in today's FOMC Announcement (see Stock Market Calendar). FOMC, Federal Open Market Committee, accouncement is when the feds announce the result of their meeting on monetary policy every month. Investors are obviously pleased with the rates staying unchanged as the market rebounded strongly following the announcement although it did not have the time to go back all the way to breakeven for the day. Trading volume also came back strongly after weeks of declining volume. All these goes to further reinforce the resilience that we have witnessed in the market so far and give credibility to the reversal.

Today's market action continue to take the Dow slowly off the short term overbought condition without affecting prices much. A sure sign of strength. There's still nothing in the indicators to doubt this new intermediate bull trend. Immediate support level will be at about 10,500 with immediate resistance at about 11,000.

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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