Stock Market Analysis

Monday, January 30, 2012

Dow Continues To Struggle...

The Dow continued to move sideways today, closing marginally lower by 6 points.

Fundamentals
What started out as a dismal opening turned around on much better than expected Dallas Fed Manufacturing Survey at 10:30am, taking the Dow all the way back up to breakeven and the Nasdaq Composite into profit. Investors are definitely uncertain right now as the general sense of the market being overbought is now overpowering. Bond yields continue to drop as investors slowly reallocate back into the safety of bonds. Indeed, the market has been trading cautiously with plenty of short term profit taking over the past 7 trading days and it is certainly going to take some good surprises in the heavyweight numbers this week to convince investors to return.

Technicals
The Dow continues to struggle around the 12,800 resistance zone as I have expected. It is going to take at least a retest of the 30MA in order for the Dow to gather enough potential energy for a breakout. At this stage, there is nothing to suggest that the Dow is going to fail at this level for some significant correction once again. In fact, there are plenty of evidence to the contrary. So, lets be patient and nimble and wait for signs of confirmation.

For now, the Dow remains in all out Bull Trend.

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