Investors Continue Move To Safety
The Dow continued sideways today, gaining marginally by 2 points on mixed sales data.
Fundamentals
Sales data today were completely mixed with Retail Sales posting some encouraging gains that led to an early positive session which led to a sell off in the afternoon as neither all the other sales data today failed to impress. In an economy based on consumerism, all consumer related data such as retail sales and consumer sentiment, have significant impact on the stock market. Investors took off back to the safety of bonds, causing a sharp rise in bond yields across the board. This is obviously a move to safety ahead of tomorrow's Empire State Index, Thursday's Philley Fed and Friday's Leading Indicators. Indeed, investors have largely turned risk averse at this point in time and will likely remain so until the market show some real breakthrough.
Technials
The Dow continued to go sideways along the 13,200 points level and while trading volume picked up today, following yet another hangman signal formed yesterday (as I have mentioned to paid subscribers yesterday), it created what is known as a shooting star candle. A shooting star candle is a candle with a small or doji body with a long top wick. Such candles usually occur alongside hangman candles after a rally and are heralds of a pullback. Bearish divergence also continued and all technicals continue to support my prediction of a retest of the 30MA.
For now, the Dow turned short term neutral trend within an intermediate and primary bull trend.
Fundamentals
Sales data today were completely mixed with Retail Sales posting some encouraging gains that led to an early positive session which led to a sell off in the afternoon as neither all the other sales data today failed to impress. In an economy based on consumerism, all consumer related data such as retail sales and consumer sentiment, have significant impact on the stock market. Investors took off back to the safety of bonds, causing a sharp rise in bond yields across the board. This is obviously a move to safety ahead of tomorrow's Empire State Index, Thursday's Philley Fed and Friday's Leading Indicators. Indeed, investors have largely turned risk averse at this point in time and will likely remain so until the market show some real breakthrough.
Technials
The Dow continued to go sideways along the 13,200 points level and while trading volume picked up today, following yet another hangman signal formed yesterday (as I have mentioned to paid subscribers yesterday), it created what is known as a shooting star candle. A shooting star candle is a candle with a small or doji body with a long top wick. Such candles usually occur alongside hangman candles after a rally and are heralds of a pullback. Bearish divergence also continued and all technicals continue to support my prediction of a retest of the 30MA.
For now, the Dow turned short term neutral trend within an intermediate and primary bull trend.
posted by Jason Ng at 5:45 PM
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