As predicted, Dow resistance at 12700 seems hard to beat. It remains so today. At this current moment, Dow is at 12611. Be wary of STI between 2900 and 3000. 3000 is a strong resistance. I have explained what it takes for Dow to climb over 12900 last week, just like STI needs to climb over the 3000 hurdle.
For that to happen, US Economical reports from today, Tuesday to Friday is important. However I don't see this happening today. Dow dropped to red after Chicago PMI reports a figure of 60.2 compared to analysts' estimates of 63.1. Chicago PMI is a monthly measure of the business conditions based on surveys of purchasing managers across Illinois, Indiana and Michigan. It is important because it precedes the more anticipated ISM report on Wednesday.
IF ISM misses expectations tomorrow, it would mean that we should not expect good results from any Enterprise Reports that will be released in February. That would not be good for this overbought market.
Tomorrow, we not only have the ISM report, we also have to pay attention to ADP employment report, a precursor measure to Friday employment reports.
Hence I encourage all NOT to take up ANY NEW positions until this Friday after US open, where the all important Non-farm payroll and Unemployment Rate will be released.
Rgds Daniel
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#07-02 S(069541),
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