Stock Market Analysis

Thursday, February 21, 2013

Dow Continues Down to 30MA

The Dow retreated 46 points today as economic data turned in worse than expected.

Fundamentals
US market retreated a second straight day today as economic data continues to worsen. All of the heavyweight economic data today turned in dismal; from Jobless Claims to Philley Fed and Leading Indicators. The slightly better than expected existing home sales did nothing to offset the negativity set by these heavyweight indicators. Investors continued their rush for safety today, depressing bond yields across the board as options traders continue to keep total equities put call ratio above 1.1 in a decisive bearish vote. Could this be the start of that significant pullback everyone's been speculating?

Technicals
As I mentioned to paid subscribers yesterday, whenever total equities put call ratio and the VIX surge the way they did, the market's probably going to turn around upwards again soon. In fact, from the way the Dow rebounded intraday off its 30MA and how it is no longer in short term overbought condition, this could be where the Dow continue its journey upwards. Yes, odds now do favor to upside rather than the "catastrophic decline" that so many experts are speculating on. That odd will tip in favor of the bears only if the Dow close below its 30MA on Friday.

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

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