Option Investor
Market Updates

What's up with the Dow\?

Printer friendly version

The Dow was trying fight the good fight today, but sellers look to be taking over. So what's moving the Dow?

Dow Jones Industrials

Looking at the components of the Dow shows that Eastman Kodak (NYSE:EK) and Procter and Gamble (NYSE:PG) are leading the Dow lower. IBM is the group leader for the second day in a row. Since IBM hasn't warned about earnings, traders are taking that to mean they are going to meet or beat estimates. Buy the rumor, and sell the fact?

Eastman Kodak Daily chart

Kodak meet met analysts' profit expectations of 52 cents a share, but that's compared to a profit of 93 cents a share for the same period last year. Kodak also announced they would cut 4.5% of its workforce, or 3,500 jobs. The stock has traded as low as 40 today, but is now off its lows. Any rallies should meet resistance at the gap that that formed today, as well as 50-day moving average. Declines should find support in the 37 to 38 range. Not the best risk/reward ratio.

International Business Machines

Even if IBM comes out with good earnings, it should have trouble getting above 102. Resistance consists of the 38.2% retracement bracket, 50-day moving average, upper boundary of channel, and previous high. IBM is going to need some good volume support to break through that mess. On the other hand, the up trend has offered good support over the past couple of months.

Jeffrey Canavan
Assistant Analyst

Intraday Update Archives