Economic Numbers Continue Recovery
As I have mentioned last Sunday, the Dow’s weekly 200MA level won’t be a piece of cake breaking and indeed it was so. Even though there was significant strength last week, the Dow still went up only by 0.51% on a week on week basis.
Not surprisingly, last Friday’s options expiration did lead to a more turbulent and higher trading volume day than usual, causing investors to overlook a much stronger than expected Empire State Index. The Empire State Index General Business Conditions index recovered sharply in October, turning in 15.73 versus 4.14 in September and consensus of 8.0. The Empire State Index along with the Philley fed (which will be released this week. See Stock Market Calendar) are considered to be leading indicators for the all important ISM index. Such a strong reading seems to suggest a much better ISM index next month and should get some investor’s notice this week.
The only push factor now is the fact that the gravitational field of the Dow’s weekly 200MA seems to be very strong and might not give up without a real fight. Like I said last week, the Dow could even pull back to about 10,900 before it muster enough energy for a decisive breakout.
For now, the Dow remains in a short term bull trend, intermediate bull trend within a primary bull trend.
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Tags: empire state, index, ism index, market calendar, State, trend
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