Dow Dips Ahead of Ben Speech
The Dow sank 106 points today ahead of Ben's speech tomorrow and amidst mixed economic indicators.
Fundamentals
More mixed economic data today, worse than expected Jobless Claims but better personal income and outlay. Such mixed economic data has been sending investors into a turmoil of late, creating this kind of extremely volatile bull market, one which takes one big step forward and ten small steps back. News of how Ben isn't good enough for his job really isn't helping especially on the eve of his speech. However, the good thing about such media overhype is that most of the selling would have been priced in and then when the real event hits the wire, it would usually have lesser downside than upside potential. Investors rushed for the safety of bonds, depressing bond yields while options traders kept total equities put call ratio slightly above par in favor of put options trading and causing a surge in volatility. If you ask me, all of these stunk of overdoing and we could see a dramatic turn around following Ben's speech tomorrow.
Technicals
The Dow failed to rebound at its 30MA like I said it will but decided to continue in its volatile uptrend pattern of dipping below 30MA before returning upwards. Indeed, this is what a volatile bull market is all about. Big ups and big downs with net effect of climbing upwards. So far, nothing in the charts suggest that this is the start of a significant downturn but if the Dow should make a significant down day tomorrow, this would change. Indeed, this continues to be the kind of market condition for the strong hearted.
Fow now, the Dow turns a short term bear trend within an intermediate and primary bull trend.
Fundamentals
More mixed economic data today, worse than expected Jobless Claims but better personal income and outlay. Such mixed economic data has been sending investors into a turmoil of late, creating this kind of extremely volatile bull market, one which takes one big step forward and ten small steps back. News of how Ben isn't good enough for his job really isn't helping especially on the eve of his speech. However, the good thing about such media overhype is that most of the selling would have been priced in and then when the real event hits the wire, it would usually have lesser downside than upside potential. Investors rushed for the safety of bonds, depressing bond yields while options traders kept total equities put call ratio slightly above par in favor of put options trading and causing a surge in volatility. If you ask me, all of these stunk of overdoing and we could see a dramatic turn around following Ben's speech tomorrow.
Technicals
The Dow failed to rebound at its 30MA like I said it will but decided to continue in its volatile uptrend pattern of dipping below 30MA before returning upwards. Indeed, this is what a volatile bull market is all about. Big ups and big downs with net effect of climbing upwards. So far, nothing in the charts suggest that this is the start of a significant downturn but if the Dow should make a significant down day tomorrow, this would change. Indeed, this continues to be the kind of market condition for the strong hearted.
Fow now, the Dow turns a short term bear trend within an intermediate and primary bull trend.
posted by Jason Ng at 7:22 PM
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