Thursday, September 30, 2010

Dow Jones Industrial Average Review, 30/09/2010

The Dow Jones surged as much as 114 points following better-than expected economic data in weekly jobless claims of 453k (consensus: 460k), final 2Q 2010 GDP of 1.7% (consensus:1.6%) and September Chicago PMI of 60.4% (consensus: 60.4%). Nevertheless, selling pressures intensified amid heightened concerns on the European banks health following Moddy’s downgrade of Spain’s credit rating and concern of burgeoning deficit in Ireland as the government is preparing to take majority control of Allied Irish Bank and pump extra cash into Anglo Irish Bank, raising the cost of repairing the financial system to as much as 50 billion Euros or US$68billion.

For Wall Street, we expect a more range bound consolidation within the 10500-11000 points prior to the 3Q 2010 reporting season in mid October.

Daily Dow Jones indicate upside momentum fizzling amid weakening technical readings.
Source: MarketWatch

Wednesday, September 29, 2010

Dow Jones Industrial Average Review, 29/09/2010

Dow Jones retreats 23 points in a tight range bound session amid uneasiness about the global economy continued to hang over the market and a light economic calendar gave investors little excuse to jump in. While the economy may not be headed for a double-dip recession, continued economic and political uncertainty ahead of midterm elections and new tax policies are making it hard for stocks to re-gain momentum.

In addition, concerns about the health of the euro zone pressured investors’ sentiment on the back of austerity measure protests in Spain, Ireland and Brussels, coupled with news reports that Allied Irish Banks PLC may need an additional capital boost to protect it from future losses. Moody's downgraded Anglo Irish earlier this week.

For Dow Jones, key economic data for the rest of this week are weekly jobless claims (tonight), September Chicago PMI (tonight), September ISM and consumer sentiment (tomorrow). Immediate resistance targets are 10920 (May 12’s high) and Year-To-Date high of 11258 (April 26). Immediate supports are situated around 10500-10600 points.

Daily Done Jones chart shows that it is likely to undergo range bound until the 3Q reporting seasons start in mid October.
Source: MarketWatch

Tuesday, September 28, 2010

Dow Jones Industrial Average Review, 28/09/2010

Dow Jones climbs 46 points, after falling as much as 78 points in an intraday,
amid speculation of more quantitative easing by Fed. Sentiment was sluggish in early trade as investors weighed weaker-than-expected consumer confidence data and home price index as well as sluggish European markets.

The 20-city home sales price index grew 3.2% in July from a year earlier, falling short of expectations for an increase of 3.3% while September’s consumer confidence index fell to 48.5 vs. August's 53.2 and consensus’ 53. Meanwhile, European stocks
fell as Irish and Portuguese bonds plunged, fueling concern that the sovereign-debt crisis is worsening.

For Dow joint, key resistance targets are at 10920 (May 12’s high) and year-to-date high of 11258 (April 26). Immediate supports are situated around 10500-600 points.

Daily Dow Jones is facing an immediate resistance at 11000 level.
Source: MarketWatch

Monday, September 27, 2010

Dow Jones Industrial Average Review, 27/09/2010

Dow Jones went down 48 points after rallying 2.4% last week.

With little on the economic calendar Monday, the Dow Jones eased 48 points after September rally of 8.4% and 2.4% last week as worries about the financial sector offset excitement over a fresh round of corporate deal-making announced by Southwest Airlines, Wal-Mart and Unilever.

Meanwhile, financial stocks mostly dipped as concern remains about the health of Europe's banking sector. Moody's Investors Service cut its rating on Anglo Irish Bank
Corp., one of Europe's more troubled banks in recent months. Global banking giants like Barclays PLC and JPMorgan Chase & Co. each fell more than 1%.

For Dow Jones, key economic data will be watched for further clues on whether the economic recovery is still on track and if the market's recent rally is justified. Major announcements are September consumer confidence (28 September), August’s consumer spending (1 October) and ISM index (1 October).

With positive technical readings after breaching the 3 months high of 10720, higher resistance targets are at 10920 (May 12’s high) and Year-to-date high of 11258 (April 26). Immediate supports are situated around 10500-10600 points.

Daily Dow Jones shows immediate resistance target at 11000 points.

Sunday, September 26, 2010

Dow Jones Industrial Average Review, 24/09/2010

Dow Jones up with 4th consecutive weekly gains.

The Dow Jones soared 197 points last Friday and posted a 2.4% weekly gain to 10826 points . It is the Dow fourth straight week of gain following better-than-expected U.S. Aug durable order books. Although the headlines indicated a 1.3% decline, excluding transportation, new orders rose 2%. Moreover, investors focused on orders for non-defense capital goods excluding aircraft which increased 4.1% in August.

Meanwhile, rising German’s business climate index in September to 106.8 (consensus: 106.4) also injected another impetus to the Dow to record a strong surge in traditionally sluggish September. So far, the Dow has rallied 8.4%, which would be the best monthly gain since July 09 (+8.6%)

For Dow, key economic data will be watched for further clues on whether the economic recovery is still on track and to see if the market's recent rally has support. Major announcements are September consumer confidence (28 September), August’s consumer spending (1 October) and ISM index (1 October).

Weekly Dow Jones Shows a marching towards year-to-date high of 11258 amid bullish indicators.
Source: MarketWatch

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Friday, September 24, 2010

Dow Jones Industrial Average Review, 23/09/2010

Dow Jones falls 77 points amid rising weekly jobless claims and sluggish Euro-zone economic data.

Despite positive Aug’s existing home sales of 4.13m units (consensus: 4.1m) and leading indicators of 0.3% (consensus: 0.2%), the Dow dropped 77 pts to 10662, as nervous investors weighed a surprise jump in weekly jobless claims and fears on European economic health.

Weighing on sentiment for Europe much of the day was a euro-zone survey of Sept’s PMI, which fell to 53.8 (Aug:56.2), the slowest in seven months. On the other hand, the cost of insuring peripheral euro-zone government debt against default continued to rise Thursday. Irish, Portuguese, Italian and Spanish CDS spreads all widened.

Ireland's economy also contracted, adding to concerns about Europe's economic recovery. 2Q10 contracted by 1.2% compared to 2.2% in 1Q10.

Dow Jones shows negative technical readings may push index lower to 200-D SMA
Source: MarketWatch

Wednesday, September 22, 2010

Dow Jones Industrial Average Review, 22/09/2010

The Dow Jones ends flat after rising as much as 80 points in an intraday trading following the strong August housing stats of 598k beats the consensus of 535k. Together following the word from the Federal Reserve that they are ready to do more to help the economy. However, the Dow ended flat with a 7.4 points gain to 10761 due to profit taking activities after surging 7.4% in September and the Fed's cautious outlook on the US economy.

The 10-year treasury yield rallied to 2.59% from 2.70% earlier as investors saw the Fed's comment as a signal that more bond purchases were on the way. Meanwhile, the dollar also declined to a six-week low at 1.325 against the euro and slumped against the yen to 85.1.

For Wall Street market, we may witness some consolidation ahead as the Dow Jones already surged 7.4% in September amid still cautious economic outlook by the Fed. Immediate resistance levels are 10900-11000 whilst support level is around 10500.

Dow Jones is likely to to take a breather following a doji formation and negative cross in the slow stochastic chart.
DowJones22-9-2010 review
Source: MarketWatch

Tuesday, September 21, 2010

Dow Jones Industrial Average Outlook, 21/09/2010

Dow Jones up 146 points to a 4-month high.
The Dow rallied 146 points or 1.4% to finish at 10754, the highest since May 13, as sentiment was boosted by an official end date for the recent economic recession, IBM’s US$1.7bn acquisition deal and good corporate earnings by homebuilder, Lennar. The National Bureau of Economic Research said the recession that began in Dec 07 officially ended in June 2009, marking an 18-month downturn that was the longest recession since World War II. Meanwhile, a report from the National Association of Home Builders -- the first of a number of readings on the housing market due out this week which showed builder confidence for newly built single family homes remained steady at 13 in September, after falling for three consecutive months. Meanwhile, all eyes will focus on the FOMC’s meeting tonight (widely expected to hold rates steady), as investors will parse the Fed's policy statement for clues on the economic outlook.

For Wall Street, all eyes will focus on the FOMC meeting today as the turning point that stocks have been searching for to break out of the range with conviction. If the Federal Reserve's view of the economy brightens by just a glimmer this week, it could push the Dow to retest the 11k psychological level prior to the US mid- term election in November.

Source: MarketWatch

Friday, September 17, 2010

Dow Jones Industrial Average Outlook, 14/09/2010

After surging 529 points or 5.1% in Sept, the Dow ended 17.6 points lower to 10527 points yesterday. It hovered between +44 points and -44 points as investors reacted to conflicting data in US and Germany. Sentiment in early trade was boosted by a strong August retail sales, which grew 0.4%, beating market consensus of 0.3% and July’s reading of 0.3%. Nevertheless, the optimism was kept in check because of fresh concerns about Europe with the German’s investor confidence falling sharply in September to -4.3 (consensus: 10; Aug: +14).

For Wall Street, we reiterate our view that the Dow should consolidate around the 200-d SMA and DTL, with a tough overhead resistance at 10720 pts (3M high) ahead of the major FOMC meeting on 21 September and the September quarterly reporting season in mid Oct. Major economic announcements for the rest of this week are Aug IPI (September 15), Aug PPI and weekly jobless claims (September 16), Aug CPI and September consumer sentiment (Sep 17).

Source: MarketWatch
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