Wednesday, October 13, 2010

Dow Jones Chart Review, 13/10/2010

Wall Street rose for the 4th consecutive sessions as the Dow Jones jumped as much as 135 pts intraday amid strong JP Morgan’s results and speculation that Fed is moving toward a more accommodative policy during the FOMC meeting on November 3.

Nevertheless, profit taking activities capped its gains and the Dow Jones closed off high with a hike of 76 points to 11096. In anticipation of more Quantitative Easing (QEs) by Fed, the lingering weakness in dollar pushed the 10-year Treasury yield higher at 2.43% while commodities such as gold surged 1.8% to a record high of US$1370/ounce and oil spiked 1.3% to US$83/barrel.

The ongoing positive Dow component results by Alcoa, Intel and JP Morgan coupled with anticipation of more stimulus measures by Fed are expected to continue lift investors’ sentiment again.

Tonight, Google and AMD will release its results. Should Google and AMD results beat expectations again tonight (mirroring the earlier results by Intel, Alcoa and JP
Morgan), we could see more momentum play to push Dow higher despite an overbought market, and ahead of the FOMC meeting on November 3. Immediate resistance level is 52-week high of 11308 while immediate support level is 200-d SMA of 10500.

Daily Dow Jones indication shows that it is heading towards the middle upper trend line (UTL) channel.
Source: MarketWatch

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