WALL STREET : DJIA Snaps Losing Streak

Major Indexes Gains 1st Time This Week
Stocks started the day on a negative note, thanks to downbeat durable goods data and lackluster earnings from retail issues both high-end (Polo Ralph Lauren) and low-end (Costco Wholesale). For a while, it looked as though the market was doomed to endure a fourth straight down day. However, the Dow Jones Industrial Average (DJIA) pared its losses after finding support at its 80-day moving average, and the rebound gathered steam as oil futures powered back above the century level. A note from Fitch Ratings also helped to encourage the recently reticent bulls, with the agency opining that Germany -- the fiscal stalwart of the euro zone -- was unlikely to have its ratings impacted by the debt woes of neighboring countries. Against this backdrop, all three major market indexes managed their first daily win of the week.

The Dow Jones Industrial Average (DJIA – 12,394.66) couldn't quite gather enough steam to maintain its intraday footing above the 12,400 level, but nevertheless managed to tack on 38.5 points, or 0.3%, by the close. Eighteen of the Dow's 30 components closed higher, with DuPont (DD) and Caterpillar (CAT) leading the way. On the other side of the coin, Verizon Communications (VZ) led the dozen laggards with a 1.4% pullback. Although the Dow found support today at its 80-day trendline, the index continues to be stymied by its 50-day moving average. The blue-chip barometer has now closed three straight sessions below this closely watched technical level.

The S&P 500 Index (SPX – 1,320.47) followed suit with a modest rise of 4.2 points, or 0.3%. The SPX is now trading back above its 20-week moving average, which hasn't been breached on a weekly closing basis since Aug. 27. Finally, the Nasdaq Composite (COMP – 2,761.38) outpaced its peers by adding 15.2 points, or 0.6%. However, the COMP is still trading on the south side of its 20-week trendline, which was last violated in mid-March.

TECHNICAL ANALYSIS
Dow Jones Industrial Average
The Dow closed higher due to short covering on Wednesday as it consolidated some of this month's decline. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near-term. If the Dow extends this month's decline, the 50% retracement level of the March-May rally crossing at 12,216 is the next downside target. Closes above the 20-day moving average crossing at 12,617 are needed to confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 12,513. Second resistance is the 20-day moving average crossing at 12,617. First support is today's low crossing at 12,309. Second support is the 50% retracement level of the March-May rally crossing at 12,216.


Crude Oil Settles At 2 Weeks Peak
Crude futures cruised to a new two-week high today, as traders cheered the Energy Information Administration's (EIA) weekly inventories report. The agency reported a steep drop-off in distillate stockpiles last week, as well as a healthy uptick in refinery activity. The news effectively overshadowed a substantial build in gasoline supplies, while a softer U.S. dollar increased black gold's appeal to foreign currency holders. Crude oil for July delivery jumped $1.73, or 1.7%, to end at $101.32 per barrel -- its best finish since May 10.

HAPPY TRADING & GOODLUCK2ALL