Monday, October 18, 2010

Dow Jones Comment, 18/10/2010

Daily Dow Jones indication shows that it has more downside bias as technical readings turn weaker. Immediate resistance level is 52-week high of 11308 while immediate support levels are 10990 (10-d SMA), 10890 (20-d SMA) and 10756 (30-d SMA).

On the back of a strong Google results (released after Thursday closing) and a bevy of positive economic reports on consumer spending; tame inflation data and Empire state manufacturing index, the Dow rose as much as 46.7 points last Friday after Bernanke said the central bank has "a case for further action" to stimulate the economy, citing high unemployment and low inflation.

Nevertheless, the index ended 32 points lower to 11063 amid a dip in consumer sentiment index and bank shares slumped as concerns on the potential foreclosures crisis could erupt into costly litigation, fines and additional mortgage repurchases on banks. Sentiment was also dampened by General Electric, as the conglomerate's revenue came in short of Wall Street's expectations.

For Wall Street, investors will turn their attention to those giant corporate earnings and key economic figures as below:

18/10/2010: September Industrial Production, IBM, Apple, & CITI Group.
19/10/2010: Bank of America, Goldman Saach, Johnson & Johnson, October Housing Starts.
20/10/2010: October Beige report, Morgan Stanley, & Seagate.
21/10/2010: Caterpillar, McDonald, & UPS.
22/10/2010: Honeywell.

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