Stock Market Analysis

Tuesday, April 24, 2012

Mixed Market On Mixed Economic Data

The Dow gained 74 points while the Nasdaq Composite dropped 8 points in a mixed trading day on mixed economic data.

Fundamentals
Economic data continues its volatility with largely mixed numbers today, adding on to the uncertainty that has been prevalent in the market lately. As I mentioned the last time, this is yet another period of volatile economic data which will no doubt steady up again into the recovery scenario in the weeks to come. That's how economic data behave, like the stock market, in waves and never straight up. Investors actually returned to equities today, raising bond yields across the board but options traders continue to keep total equities put call ratio above 0.9. All of these continue to suggest a largely uncertain market due to both fundamental and technical forces.

Technicals
The Dow continues to struggle around the 13,000 points level and below its 30MA dangerously. Failing significantly at this level would confirm this as the intermediate correction that I have been talking about for so long. With May coming up and the volatility in the fundamentals, it seems unlikely for the market to make an upside breakout for one final leg before the real intermediate correction. This seems much more likely to be that correction.

For now, the Dow remains in short term neutral trend, intermediate and primary bull trend.

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