Stock Market Analysis

Thursday, September 27, 2012

Dow Gains on Jobless Claims

The Dow gained 72 points today as investors cheered a much better than expected Jobless Claims.

Fundamentals
A wave of optimism hit global markets today before US market opening as almost all major markets ended positive in Asia. This led to index futures (learn more about index futures) pointing higher in the morning before opening. Jobless Claims released at 8:30am reinforced this optimism by turning in way lower than expected and clouded any pessimism surrounding a downwards revision in Q2 GDP released at the same time. Obviously investors are more concerned about the jobs market than the GDP right now. Long term bond yields rose as investors reallocate longer term capital back into equities today. Options traders took total equities put call ratio back below the 0.9 uncertain range today but that's only one day so its nothing to read into too much.

Technicals
The Dow took a turn around today before it reaches its 30MA but if you take a look at the S&P500, it has already reached its 30MA and today is a classic successful retest of its 30MA. This has lifted the Dow and the Nasdaq as well. So far, market movement has been classic textbook. With this 30MA turn around and the Dow (and SP500 of course) in short term oversold condition, market inclination is now to upside.

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

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