Housing Data Continues To Look Good...
The Dow closed marginally higher by 4 points in yet another sideways day amidst mixed economic data.
Fundamentals
Market opened in the red on poorer than expected durable goods orders and jobless claims but took back lost grounds as the housing market continues to show signs of sharp recovery. Pending Home Sales rose 2% in December and certainly paints a consistent picture with the better than expected New Home Sales released on Wednesday. Indeed, a recovering home market is essential to overall economic recovery. Of concern today is the far worse than expected jobless claims which the regulators are blaming the heavy weather for. The surge in jobless claims has also resulted in the 4 weeks moving average for jobless claims turning upwards, which is discouraging at this critical stage of economic recovery. However, the US economy is currently going through a temporary period of volatile economic data and investors should maintain a longer perspective. Yes, economic numbers are like the stock market, going up in waves and never straight up. What investors should take note of is that the overall trend still points towards economic recovery and sustenance of the current primary bull trend.
Technicals
The Dow has been struggling at its current short term resistance level of 12000 all week but has yet to show any sure signs of weakness. Even though the Dow made a sideways day, the S&P500 and the Nasdaq Composite both made healthy advances and are both yet to enter short term overbought condition, as such, there is no reason to doubt that the current bull trend still has legs.
For now, the Dow remains in a short term bull trend, intermediate bull trend within a primary bull trend.
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Fundamentals
Market opened in the red on poorer than expected durable goods orders and jobless claims but took back lost grounds as the housing market continues to show signs of sharp recovery. Pending Home Sales rose 2% in December and certainly paints a consistent picture with the better than expected New Home Sales released on Wednesday. Indeed, a recovering home market is essential to overall economic recovery. Of concern today is the far worse than expected jobless claims which the regulators are blaming the heavy weather for. The surge in jobless claims has also resulted in the 4 weeks moving average for jobless claims turning upwards, which is discouraging at this critical stage of economic recovery. However, the US economy is currently going through a temporary period of volatile economic data and investors should maintain a longer perspective. Yes, economic numbers are like the stock market, going up in waves and never straight up. What investors should take note of is that the overall trend still points towards economic recovery and sustenance of the current primary bull trend.
Technicals
The Dow has been struggling at its current short term resistance level of 12000 all week but has yet to show any sure signs of weakness. Even though the Dow made a sideways day, the S&P500 and the Nasdaq Composite both made healthy advances and are both yet to enter short term overbought condition, as such, there is no reason to doubt that the current bull trend still has legs.
For now, the Dow remains in a short term bull trend, intermediate bull trend within a primary bull trend.
My Market Analysis Sent Straight Into Your Email Daily For Only $5/Month! **My analysis will only be posted here once every other day.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
posted by Jason Ng at 8:48 PM
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