US Market Analysis -- 12th Jan 09

DJI closed 8,599.18 for the week ended 9th Jan 09, down 435.51 points or 4.82% from previous week.
Nasdaq closed 1,571.59 for the week ended 9th Jan 09, down 60.62 points or 3.71% from previous week.
S&P500 closed 890.35 for the week ended 9th Jan 09, down 41.45 points or 4.45% from previous week.
Crude oil price finished the week at US$40.36/barrel as compared with previous week of US$46.52/barrel.

US markets gave up all the gain from previous week when investors switched their focus back to the fundamental of the economy especially the employment situation.

A recap of last week US economic data/event is as followed.

1. 5th Jan 09, Motor Vehicle Sales reported 7.7M, consensus 7.4M, previous value 7.6M.
2. 5th Jan 09, Construction Spending came in -0.6%, market expecting -1.3%, previous value -1.2%.
3. 6th Jan 09, ISM Non-Mfg Index came in 40.6, consensus 37.0, previous value 37.3.
4. 6th Jan 09, Pending Home Sales reported 82.3, market expecting 88.0, previous value 88.9.
5. 8th Jan 09, BOE cut interest rate from 2.0% to 1.5%.
6. 8th Jan 09, Jobless Claims came in 467K, consensus 540K, previous value 492K.
7. 9th Jan 09, Nonfarm Payrolls reported -524,000, consensus -500,000, previous value -533,000. Unemployment Rate reported 7.2%, consensus 7.0%, previous value 6.7%.
   

Economic data/events for the coming week is as followed

1. 13th Jan 09, International Trade
2. 14th Jan 09, Retail Sales, Import/Export Prices
3. 15th Jan 09, ECB Announcement, PPI, Empire State Mfg, Jobless Claims
4. 16th Jan 09, CPI, Industrial Production, Consumer Sentiment
   

Technically, DJI long term trend is neutral with short-term bias towards the downside. DI pair is negatively spaced but with ADX signal below 20 level, the downside might lack the strength. Stochastic signal is falling indicating the short-term downside whereas RSI still relatively flat around the 50% level suggesting the downside should be well contained. Current support level is at the 8,150 while immediate resistance at 9,000 level.


Technically, Nasdaq long term trend is neutral while short-term wise bias towards the downside. DI+ just cut down but with ADX signal below 20 level, the downside would be lacking in strength. Stochastic is falling indicating short-term downside and with RSI still relatively flat around the 50% level, the downside could be limited for the time being. Current support is at the 1,500 level with resistance at 1,620.


Technically, S&P500 long term trend is neutral with short-term bias towards the downside. DI+ just cut down but with ADX signal below 20 level indicating the downside is lacking in strength. Stochastic is falling suggesting the short-term pulling back but with RSI remains relatively flat around the 50% level, the pull back should be well absorbed. Current support is at 870 with resistance at 920.


For the coming week, investors should be focusing on the economy situation and also keep a close monitor on the status of the stimulus package proposed by Barack Obama. Obama would like to package to be approved by the Congress before he offically becomes US President on 20th Jan 09 so that he could immediately sign the paper and get the recovery plan on the way. US markets might be able to stay firm with downside limited for the time being prior to 20th Jan 09.