US Market Mixed on Better ISM Services
US market closed mixed with the Dow slightly lower by 46 points and the Nasdaq slightly higher by 3 points.
Fundamentals
Despite much better than expected ISM Services report, US proceeded to opening in the red. Indeed, the ISM Services index has never been a market moving index and traders were taking some short term profits off the table from last week's better than expected Jobs Report. Bond yields rose across the board as investors actually reallocate back to equities from bonds and VIX actually dipped in support of upside movement as US market continues to be resilient. However, the stronger the market, the greater the sense of danger. The recovery in the market since 2009 has been the steepest and strongest market recovery out of any of the previous market crisis. In fact, from the extremely peaky look of the Dow and how short a time it took for it to get there, it seems like another huge market crash may be round the corner in the next year or so... truly dangerous times in the market.
Technicals
The market continues to be stronger than most people have expected and at this point, I would say that it has shaken off the effects of the May intermediate correction and is once again set on its way upwards guided by the 30MA line. Indeed, even as the outlook gets more and more dangerous with each new high, swing traders should still stick to the prevailing trend and trade accordingly until evidences suggest otherwise. Remember, any volatilities above the 30MA line is irrelevant until the line is broken.
For now, the Dow resumes an all out bull trend.
Fundamentals
Despite much better than expected ISM Services report, US proceeded to opening in the red. Indeed, the ISM Services index has never been a market moving index and traders were taking some short term profits off the table from last week's better than expected Jobs Report. Bond yields rose across the board as investors actually reallocate back to equities from bonds and VIX actually dipped in support of upside movement as US market continues to be resilient. However, the stronger the market, the greater the sense of danger. The recovery in the market since 2009 has been the steepest and strongest market recovery out of any of the previous market crisis. In fact, from the extremely peaky look of the Dow and how short a time it took for it to get there, it seems like another huge market crash may be round the corner in the next year or so... truly dangerous times in the market.
Technicals
The market continues to be stronger than most people have expected and at this point, I would say that it has shaken off the effects of the May intermediate correction and is once again set on its way upwards guided by the 30MA line. Indeed, even as the outlook gets more and more dangerous with each new high, swing traders should still stick to the prevailing trend and trade accordingly until evidences suggest otherwise. Remember, any volatilities above the 30MA line is irrelevant until the line is broken.
For now, the Dow resumes an all out bull trend.
posted by Jason Ng at 6:51 PM
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