Yes, for yesterday for sure. For tomorrow? I don’t think so. Friday the Dow was flirting with hitting the psychological benchmark of 18,000, but yesterday US stock market suffered its biggest daily drop in the last seven weeks. There were some underlying bearish effects like oil’s price slide, dragged down the oil companies and other uncertainties and bad economic reports from China(disappointing trade numbers), Japan (GDP has contracted again) and Europe(German industrial production smaller than expected). Losses led by energy sector stocks. The changing of sentiment was shown in the VIX index, which rose by 20% on Monday.
- SP500 -0.73%
- DJIA – 0.59%
- Nasdaq -0.84%
All in all this less than 1% drop is nothing, we are still confident about more gains in December and some Santa Claus rally. There is some pressure on prices after the 7 weeks rally and prices are in untouched record territories, but after couple of days consolidation might come again more gains. In terms of technical analysis we only open new long positions if the resistance level at 17.960 would be taken on DJIA.
The BFM Assets Team.
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