Sterling Market Commentary for Monday November 19th, 2012
A Look at Friday’s Market: The overall market moved moderately higher Friday in a broad based move that saw the majority of the sectors I follow move higher on the day as well. In my opinion it was pretty much a bounce from an oversold condition. I see nothing in the charts from Friday’s trading activity to indicate that the market is going to start any sort of a sustainable rally. In the commodities markets, Oil was higher by $1.05 to $86.92 per barrel, and Gold was higher by $0.90 to $1,714.70 per ounce. In the grain markets, Wheat was lower by $0.074 to $8.380 per bushel, and Corn was higher by $0.056 to $7.270 per bushel, while Soybeans were lower by $0.186 to $13.832 per bushel.
A Few Thoughts on Monday’s Market: In looking at the charts from Friday’s trading session it looked to me as if the market was essentially bouncing from an over sold condition. We may see a small rally over the course of the next couple of trading session, but then as the major market indices move back towards their 9-day moving averages I expect the market to start to head back lower. This week’s economic calendar is rather light, so I do not see any big economic news until Thursday’s jobless claims numbers are released. If this holds true then you have your 3 day bounce in the market before it returns to moving back lower.
The Dow Jones Industrial Average: The Dow Jones Industrial Average closed at 12,588.31 I have lowered my upside resistance level on the Dow Jones Industrial Average at 12,715.93 on a closing basis. I now see downside support coming in at 12,118.57 on a closing basis. Current Expectations: I think we are starting a new trend lower in the Dow. I am expecting the Dow Jones Industrial Average to continue to move lower and test 12,118.57 on a closing basis.
Dow Jones Transportation Average: The Dow Jones Transportation Average closed at 4,891.27 I continue to see upside resistance on the the Dow Transportation Average at 5,215.97 and downside support at 4,873.76 and then at 4,795.28. Current Expectations: I think the Dow Transports are going to track sideways between support and resistance for the foreseeable future.
S&P 500 ‘SPX’: The S&P 500 closed yesterday at 1,359.88 I currently see upside resistance on the S&P 500 at 1,367.59 and downside support on the S&P 500 at 1,343.36 and then at 1,334.76 Current Expectations: I think the S&P 500 is going to move lower and test 1,343.36 and then 1,334.76 on a closing basis.
NASDAQ 100 Index ‘NDX’: The NDX closed yesterday at 2,534.16 I see upside resistance on the NDX currently at 2,623.33 and downside support at 2,458.83 on a closing basis. Current Expectations: I think the NDX is going to continue to move lower and test 2,458.83 on a closing basis.
The Bottom Line: I think the market will continue to move lower for the next few trading sessions.