Economic Numbers Recovers
The Dow traded sideways today as expected as the SP500 struggle at its August highs, closing down marginally by 17 points today.
Fundamentals
Even though sales data came in decent today, the market still opened deep in the red from short term overbought sentiment and ended the day mixed with the Nasdaq Composite higher and the S&P500 / Dow lower. The data today continues to suggest that we are in yet another cycle of better economic numbers. If tomorrow’s Empire State Index (see Stock Market Calendar) turns out better, optimism could go into full swing as investors could be convinced that the previous worsening of economic numbers was just a seasonal, temporal thing.
Technicals
Like I said in my analysis yesterday (which only paid subscribers would recieve in email), we should expect the Dow to pullback and test the 10,400 area for support before it has the energy to go for the next resistance level at 10,700 points. For now, odds are favoring to upside since the Dow has made a clean breakout of the daily 200MA and did not make a new low in August. This completed a classic Intermediate reversal pattern which has once again ensured the survival of the intermediate bull trend.
For now, the Dow remains in a short term bull trend, intermediate bull trend within a primary bull trend.
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Tags: nasdaq composite, resistance level, reversal pattern
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