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Dow Jones technical analysis - April 8


Dow has been range bound for well over a month. The expected retest of 12850 levels has finally occurred. The momentum or the volumes still do not support an explosive upward break. And such a break is usually accompanied by a fundamental trigger, we find such a trigger lacking in this scenario. This gives rise to suspicion the markets may down from here. But the thing to watch out for is the earnings, and in particular any positive surprises and in particular from the financial companies and banks. Alcoa's result has already shown results are likely to be on darker side. Nobody, nobody in the street expects, financial to do better. We do not know what will come out of the mystery box, how big the write-offs will be, the provisions, the equity capital, the funding and the guidance. The impact of positive surprise in this pessimistic scenario is very high compared to companies giving the expected results.
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