US markets gave a captivating performance in last trading session. Dow rose from a day low of 17742 to a day high of 17918, finally settling down to close at 17908. That is as bullish as you can lay your fingers at!
There were a couple of compelling reasons for such a fascinating journey northwards in US equities. Most compelling reason for this bullish lift off was JP Morgan coming out with good results. While the street was expecting poor show from financial institutions, out came results of JP Morgan sweetly surprising market participants. Bears were caught unawares and got painfully caught in a bear trap.
Well that seems almost history now. Dow Jones has marched majestically towards its psychological level of 18000. Now the most important question is - will Dow achieve 18000 in trade today? I think it will, although Dow should open flat. As of publishing this post, European markets are marginally up and Dow Futures is also slightly up. Oil after being in red has shown strength and entered into green territory, which is good news for bulls.
If Dow misses 18000 today, I am sure traders will take the index to this important level before going on weekend holiday.
But what after that? After Dow reaches this psychological level, we should be on a look-out for correction. So we must exit all our long positions in Dow. I must admit that Dow may go even higher than 18000 before correcting, but that will be taking high risk. I say so because 18000/18200 in Dow is a strong resistance zone. Keep watching !
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