Cautiousness Ahead of ISM Index
The Dow continued sideways today dropping 47 points ahead of tomorrow’s ISM index.
Fundamentals
Market opened strongly into the better than expected GDP, Jobless Claims and Chicago PMI but was soon overwhelmed by profit taking ahead of tomorrow’s ISM index. What cheered investors most is the huge surprise on the Chicago PMI which seems to point towards a positive surprise in tomorrow’s ISM index (see Stock Market Calendar). Yes, looking at the recent trend of economic data, we seem to be in a renewed cycle of better than expected numbers and this is certainly what the market needs to make new highs.
Technicals
Indeed, tomorrow’s ISM index may be the catalyst needed for the market to continue its bullish climb. So far, the Dow has been moving sideways and slightly downwards this week following last Friday’s huge single day rally. This is completely normal and by the textbook. As long as the Dow do not go below the low of last Friday’s candle, the bull trend is in no danger. So far, the sideways movement have taken the Dow completely off short term overbought condition and it is now in an excellent position to make another climb. But of course, tomorrow’s ISM index could still change things if investors do not see the economic numbers coming back as expected.
For now, the Dow remains in a short term bull trend, intermediate bull trend within a primary bull trend.
My Market Analysis Sent Straight Into Your Email Daily For Only $5/Month! **My analysis will only be posted here once every other day.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
Related Articles:
