Sterling Market Commentary for Friday April 13th, 2012

A Look at Thursday’s Market:  The overall market moved sharply higher in a broad based move that saw basically every index I track move higher on the day.  Thursday’s move in my opinion was nothing more than a bounce from the previous move lower,  and was probably exaggerated to the upside by comments from the Fed about the possibility of continuing quantitative easing and greater than expected jobless claims.  It is a sad state of world affairs where comments about maintaining emergency level fiscal stimulus is having such an impact over 3 1/2 years after the financial crisis of 2008.  It is also a sad commentary on the market when so much of the activity is controlled by computers trolling the news wires for headlines to base their trading decisions on.  Think about for a minute.  This creates a market where the activities of a young writer, with no market experience at one of the networks or newspapers could influence the direction of the market by their mood of the morning. It also is a sign that fewer and fewer of the market participants are actually able to think for themselves.  This can’t be a good thing in the long run.

In the commodities markets, Oil was higher by $0.94 to $103.64 per barrel, and Gold was sharply higher by $20.30 to $1,680.60 per ounce. In the grain markets,  Wheat was higher by $0.112 to $6.392 per bushel, and Corn was higher by $0.014 to $6.374 per bushel, while Soybeans were higher by $0.19 to $14.410 per bushel.

A Few Thoughts on Friday’s Market:  In looking at the charts from Thursday’s market, despite Thursday’s sharp move higher, none of the various sector indices I looked at broke their current downward trend.  The same can be said for the individual stocks I looked at.  Basically Thursday’s move appears to have been a bounce from an sharply oversold position.  I think the move higher Thursday got some extra strength due to the greater than expected number of jobless claims.    The pre-market futures are negative this morning, and if we finish the day lower, then I believe we will be able to say that this confirms the downward trend.

The Bottom Line:  I am expecting the overall market to continue to move lower.

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