Prices seem to have recovered to a decent post-mid year level but again, some instability and poor news pouring from Europe and US have not helped the turnaround. The key question has to be if the short uptrend will be short-lived or will more bear action be realised?
Clearly the bears are leading the battle today on indices all over the world with the Dow already dropping 100+ points to ~12510 (3am SG time latest). But the bulls did recover from a 12460 position to pull back up to 12510 after a steep market decline right after the open. And this revelation of some bull action then bear tail repetitively have really gotten many traders burnt and hugely frustrated. What exactly is the true trend of the Dow Jones and the economic recovery that is being priced into key markets?
Looking at the Dow's daily chart, the pullback over the last 2-3 days was not unforseen. It was simply a cause of huge euphoria that got the market whipped up beyond its expectations, charging out of the upper bollinger bands. And so, the correction came in the form of Europe 'bad news' and US 'Fed's inability to act swiftly'. Nonetheless, I am seeing somemore pullback at least for the rest of the week with bulls and bears clearly oscillating control. At least when prices start to correct a further 3.1% from 12510 levels we can be quite sure that some form of extreme buying in will occur again.
At least this is the only, but yet true, market constant we are beginning to appreciate thus far.