More Selling Into Strength...
The Dow closed slightly lower today by 25 points as investors continue to sell into every bit of strength.
Fundamentals
Market opened strongly today on bargain hunting and was met with a sell off almost immediately. The market then found some strength from the better than expected housing data at 10am but soon succumbs to more selling into the strength throughout the day. Basically, traders are telling us by their actions that they are going to sell into every bit of strength in order to return to bonds in the face of this intermediate correction and no amount of good economic data or earnings is going to change that, for now. With investors expecting a higher GDP reading this Friday, which can of course lead to an easy disappointment and more sell-off, I expect investors to trade cautiously tomorrow, leading to a uncommitted day.
Technicals
As I told paid subscribers yesterday, it is not unusual to see a few relatively sideways day following Tuesday's big down day. The fact that the Dow formed an inverted hammer candle today also reinforced the fact that this is one of those few sideways days before yet another leg down. However, I will be cautious to downside as the Dow nears the 13,000 points psychological support level.
For now, the Dow remains in short term bear trend within an intermediate neutral trend and primary bull trend.
Fundamentals
Market opened strongly today on bargain hunting and was met with a sell off almost immediately. The market then found some strength from the better than expected housing data at 10am but soon succumbs to more selling into the strength throughout the day. Basically, traders are telling us by their actions that they are going to sell into every bit of strength in order to return to bonds in the face of this intermediate correction and no amount of good economic data or earnings is going to change that, for now. With investors expecting a higher GDP reading this Friday, which can of course lead to an easy disappointment and more sell-off, I expect investors to trade cautiously tomorrow, leading to a uncommitted day.
Technicals
As I told paid subscribers yesterday, it is not unusual to see a few relatively sideways day following Tuesday's big down day. The fact that the Dow formed an inverted hammer candle today also reinforced the fact that this is one of those few sideways days before yet another leg down. However, I will be cautious to downside as the Dow nears the 13,000 points psychological support level.
For now, the Dow remains in short term bear trend within an intermediate neutral trend and primary bull trend.
posted by Jason Ng at 4:02 PM
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