Swing Trading Strategies & Stock Picks Since 2003

Dow Jones Industrial Average

25^th Aug 09

Key Statistics

Open: 9509.21

High: 9620.00

Low: 9508.98

Close: 9539.29

Change: +30.01 (+0.32%)

Prev Close: 9509.28

RSI: 62.51

MACD: 161.71

Snapshot

• Dow ended +30.01 (+0.32%) points higher, S&P 500 up 0.24% and Nasdaq up 0.31%
• Consumer Confidence and home prices data shows improvement
• President Obama re-nominates Fed Chairman Ben Bernanke
• Fed predicts budget deficit of $9 trillion over the next decade

Current Market view – Cautious

Market Strategy

It’s not a seller’s market now as we witness buying at every dip in the market.

One should prefer to stay with trend and should make long positions on dips.

Market Commentary

The U.S. markets extended the rally on Tuesday touching fresh 2009 highs after a couple of better than expected economic reports strengthened investor’s confidence in the economic recovery.

Investors also got a boost as President Obama re-nominated Fed Chairman Ben Bernanke for a second term in office.

The White House releasedits deficit and economic forecast. It predicts a federal budget deficit of $9 trillion over the next decade and a deficit of $1.58 trillion in 2009. The $9 trillion is $2 trillion more than what the administration had forecast previously.

DJIA hit an intra-day high of 9620 after the release of Consumer Confidence Index data.

The index rose to 54.1, which was better than expected. The jump in the Consumer Confidence Index strengthens the view that the economy is on recovery path and there is participation of the consumer.

Retail stocks got a boost from the positive news and ended 1-2% higher. Dow component, Home Depot Inc. rose 1.07%.

S&P/ Case Shiller report showed that home prices rose 2.9% in the second quarter versus the first quarter. The report was better than expected.

Home builders' shares rose, with Lennar Corp up 2.8 percent at $14.97 and KB Home up 3.3 percent at $18.08. Pulte Homes Inc, the biggest U.S. builder, rose 3.5 percent to $13.06.

Oil prices fell and led to weakness in the oil and energy stocks. Both Exxon Mobil and Chevron Corp were down 0.87% and 0.16%.

21 of the 30 Dow components ended in green leading Dow to an intra-day high of 9620. Leading the advances were Boeing Co., Bank of America Corp., Intel Corp. and Merck Inc.

The Day Ahead

·         New home sales and durable goods order data is due from the Commerce Department.