Stock Market Analysis

Monday, July 22, 2013

Economic Data Volatility Period...

A sideways day in the market as economic data confirms its period of volatility following the past month's excellent performance.

Yes, economic data behaves exactly like stock prices do!

Even in a bullish economy, economic data will perform well for a while and then enter a period of uncertainty and volatility before moving on to new highs. Vice versa in a bearish economy. This ebb and flow of economic data also correlates to the ebbs and flows of the stock market. Understanding this fact should tell you that you should hold through periods of economic data volatility in a recovering economy rather than go into panic mode and sell on each bad news.

However, other people are still going to be selling into each bad news due to short term profit taking or whatever their reasons may be... that's when you should be accumulating. Yes, the Dow's still going to have to revisit its 30MA before it can confirm the resuming of this bull trend. That's when you should be accumulating.

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

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