Stock Market Analysis

Wednesday, July 25, 2012

US Market Mixed on Earnings & Uncertainty

The Dow gained 58 points in a mixed trading day with the Nasdaq closing down by 8 points.

Fundamentals
Uncertainties on a global scale along with the lousier than expected New Home Sales and earnings season resulted in a mixed volatile trading day with a mixed close. New home sales pulled back after two months of gain, which is very much expected. Everytime the Nasdaq does something different from the Dow, the Dow follows shortly. This means that the market is still very much bearish inclined as investors continue to retreat for the safety of bonds today as bond yields declined steadily across the board. Options traders also took total equities put call ratio above 0.9 once again, indicating uncertainty. Indeed, this is an extremely volatile period with earnings and global uncertainty. This Friday's GDP is also extremely uncertain, so we can expect to see more returning to safety tomorrow ahead of Friday's release. Lets see what the technicals say.

Technicals
No surprises there as the Dow breaks below its 30MA following the bearish divergence I mentioned on Monday. Bargain hunters stepped in today but did nothing significant to change the now bearish inclination. A revisit of the June low remains in the books.

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

0 Comments:

Post a Comment

Links to this post:

Create a Link

<< Home