Today Dow Industrial Jones closed at 12291 and S&P 500 at 1265.43 inspite of weak Dallas Mfg. data. In order for dow to fall, it needs to break 12285 level for lower side, and 12381 for upside. For S&P500, the lower level resistance is 1265, while upper resistance is at 1275.
In this article I'll compare the chart of US GDP, Dow Jones Industrial and S&P500 of past 5 year.
| US GDP in 2007 grew from 0.9, 3.2, 2.3, 2.9 During the same year, Dow started at 12398, reached the highs at 14093 and low at 12114 and closed at 13365. US GDP in 2008 grew from -0.7, 0.6, -4, -6.8. During the same year, Dow reached high at 13058, lows at 8046, and closed at 9034. US GDP in 2009 grew from -4.9, -0.7, 1.6, 5. During the same year, Dow reached low at 6626, high at 10428 and closed at 10428. US GDP in 2010 grew from 3.7, 1.7, 2.6, 3.1. During the same year, Dow reached high at 11577, lows at 9686, and closed at 11577. US GDP in 2011 grew from 0.4, 1.3, 1.8. During the same year, Dow reached high at 12810, lows at 10771 and at present at 12291 Even if we compare the GDP of 2010 and 2011, inspite of good GDP number Dow Jones closed in 2010 at 11577, while 2011 had a stalled growth and its sitting 12291 which is overbought and I still think there will be atleast 1000 -2000 point pull back. ******************************************************************** Tomorrow there is no economic data coming out from US or Europe except short term Italian bond auction. Since Italian bond yield is sitting at 7, which is at danger level, it will be interesting to see how much interest Italian Govt. needs to pay. Take a break till Jan 3rd, and don't loose any money till then. If your bearish then buy, TZA, TVIX, FAZ or VXX If your bullish then buy TNA, FAS, ERX. I am still bearish. |
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