Stock Market Analysis

Thursday, January 13, 2011

Economic Data Goes Through Volatility

The Dow closed marginally lower by 23 points as jobless claims surged unexpectedly.

Fundamentals
Jobless claims surged unexpectedly today due to seasonality, turning in 445K, far worse than the consensus of a lower 405K. However, seasonality played a big role in this surge, as such, investors would be glued to next week's jobless claims report for confirmation. Stocks opened up marginally lower today on this pre-market release and remained largely negative eventhough some strength was seen in the late morning session. Tomorrow's retail sales and consumer sentiment will be in focus. Consumer sentiment has been rising for two straight months so far and some volatility should not be taken negatively. The US market is clearly in a period of volatile economic data right now. Yes, nothing go straight up or down, even economic data. All recovering economies go through occassional period of worse than expected economic data and investors need to take heed of the overall trend rather than take these volatilities too seriously.

Technicals
Today's just another sideways day as the market continue to lose short term bullish momentum. However, going by the strength of the intermediate bull trend, we expect a short one or two days retreat, perhaps down to the daily 30MA line in order for the bull trend to continue upwards healthily.

For now, the Dow remains in a short term bull 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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