Market Comments – Dow Jones 21 Aug 13


After FOMC announcement on 21 Aug 13, DJ has dropped about 100+ pts on that trading day.
Currently, DJ is approaching its trendline support. If this support is broken, we are looking at support 2 and 3 at 14,640 and 14,360 respectively. MACD is still negative and there is no sign of crossing its signal line yet. Investors are urged not to long DJ but wait to see how the index behave when it reaches support.

If you are to observe, the previous resistance of 15,600 mentioned 24 May 13 posting was not broken in Aug 13 when the index attempted to make new high.

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Ben Bernanke Official PortraitThe less things change, the more time everyone has to speculate about what might happen if things do change. As expected, the Federal Reserve’s FOMC today announced that it is leaving the overnight lending rate unchanged at 0.25% or less and that it will continue its $85 billion per month asset purchase program.

The vote was 11 to 1, with only Fed Governor Elizabeth George voting against. George’s “no” vote was based on here that “continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.”

The Fed’s economic projections got a pretty good workover, though, since the publication of the December projections. The projected GDP growth for 2013 has been lowered from a range of 2.3% to 3% to a new range of 2.3% to 2.8%. Estimated GDP growth for 2014 has dropped from…

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