DOW rose 331.62, or 2.94%, to 11,615.77
S&P rose 35.87, or 2.87%, to 1,284.88,
COMP rose 64.27, or 2.81%, to 2,349.83.
RUT rose 16.90, or 2.40%, at 721.04.
Factors causing the rally include:
-Data showing that services sector activity fell less than expected for July.
-Oil went down to $118 before settling at $119.17.
-Interest rate hike aimed to tame inflation is not imminent
In a bullish trend, one would expect to see a carry over of the bullishness of yesterday - after all, all the major indices went up by more than 2% on the same day.
However, in the current bearish and choppy market (we've not forgotten that the housing and banking sectors are still facing problems so entrenched that policies after policies to alleviate them have so far not stopped houses from being foreclosed and banks from being shut down), it's not surprising if profit taking begins as early as today.
Charts seem to agree with me.
DOW Daily
- Bearish divergence for period spanning Jul 30 and Aug 5.
- We could be trading within yesterday's range and not go any higher than yesterday's close.
S&P Daily
- Bearish divergence for period spanning Jul 30 and Aug 5.
- We could be trading within yesterday's range and not go any higher than yesterday's close.
RUT Daily
- Bullish wedge indicating that price is likely to break up sometime this week.
- But bearish Hidden Divergence for period spanning Jun 5 and Aug 5 suggests that for today, we are not likely to see price going beyond yesterday's high.
ER2 (Sept Settlement) Daily
- Bearish divergence for period Jul 30 and Aug 5 suggests that for today, price is not likely to go higher than yesterday's close.
- Bullish wedge: price could break out of the current trading range within this week or the next and we might see a brief rally then
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