FOMC Week!

The Dow closed 1.19% higher last week as the US market continue to climb against volatile economic numbers.

Even though economic numbers have been largely volatile over the past few weeks, important forward looking indicators such as last week's Empire State Index, Leading Indicators and Philley Fed have pointed to continued economic growth. This continues to reinforce the economic recovery scenario which is especially important for the long term prospects of the market.

So far, with only 6 more trading days to go in January and a strong sense of the market being short term overbought, this continues to be a dangerous time to be newly long. The NASDAQ composite has already staged a significant pullback to its 30MA short term support and chances that the Dow would follow suit this week remains very high. This is a week of heavyweight releases; consumer confidence on Tuesday, FOMC announcement on Wednesday, Durable Goods Orders on Thursday and GDP on Friday (see Stock Market Calendar).
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