Stock Market Analysis

Sunday, April 10, 2011

CPI Week Ahead

The Dow gained a meager 0.03% last week in a sideways trading week as we expected.

Despite all the good and bad news in the market, investors seem to have a mind of their own as the market traded largely technical driven last week. With the Dow at its short term resistance level of 12,400 and the market short term overextended after the strong two weeks rally, plenty of short term profit taking can be expected while the last of the herd continue to pour into the market. As I have mentioned, the market either retest its short term support level at the 30MA or wait for the 30MA to catch up before going higher. At this point of time, since the 30MA line is already so near, either scenario don't make much difference as upside potential outweighs downside potential.

The week ahead is going to be slightly volatile since it's options expiration on Friday for April options (see Stock Market Calendar). It is also CPI week this week with CPI releasing on Friday as well. The Feds are watching this number in order to decide when to raise rates which makes it an important number of investors as well.
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