Stock Market Analysis

Thursday, September 02, 2010

Optimism Ahead of Jobs Report

The Dow closed up by another 50 points today as investors remain optimistic ahead of tomorrow's Jobs Report.

Fundamentals
Investors were clearly encouraged by yesterday's better than expected ISM Index and are speculating on tomorrow's Jobs Report turning in a positive surprise as well (See Stock Market Calendar). This comes on the back of higher than expected jobless claims and lower than expected factory orders. The pending home sales numbers released in the afternoon could have sustained the rally but the market was already up and rising way before that. Consensus is already expecting a poorer unemployment rate and no-farm payroll in tomorrow's report as such, any positive surprise could really save the struggling intermediate bull trend.

Technical
The Dow continues slightly upwards relative to yesterday's rally today in a low volume trading day that looks more like a dead cat bounce. What was missing in today's "rally" was actually volume. The declining volume over these two positive days truly made the "rally" look suspicious. This, along with the fact that both the daily 30MA and 200MA are acting as overhead resistance and the prior completion of a head and shoulders formation made this "rally" sound more like a dead cat bounce than a true reversal.

For now, the Dow turns a short term neutral 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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