Stock Market Analysis

Thursday, October 21, 2010

Leading Indicators and Philley Fed Inline...

The Dow moved sideways today, closing higher by 38 points as economic data turn in inline with expectations.

Fundamentals
Leading indicators and Philley Fed (see Stock Market Calendar) turn in inline with expectations today, spurring a short rally and the profit taking that I have mentioned a few days ago in the analysis given to paid subscribers. The market has been pricing in better than expected leading indicators and philley fed on the back of the better than expected Empire State Index last week and some profit taking should be expected no matter how today's numbers turned out.

Technicals
Even though the Dow held positive today, it is clear that the 11,000 points resistance zone is still promoting a great deal of profit taking and therefore resistance. Even though the Dow made a higher high and a higher low today versus yesterday, it still closed within the trading range of the past few days which makes it nothing more than another sideways day. The Dow also challenged the April highs intraday today at about 11,200 points before retreating which also prove that there is resistance in the market for making new highs under such weak economic conditions. Like I said before, the 11,000 points resistance zone, which is also the weekly 200MA resistance level, isn't going to give in without a significant fight. This is certainly not the time to be newly long.

For now, the Dow remains in a short term neutral trend, intermediate bull trend within a primary bull trend.
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Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!

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