Sterling Market Commentary for Tuesday November 27th, 2012
A Look at Monday’s Market: The overall market was mixed on Monday with the NASDAQ 100 ‘NDX’ finishing the day higher due to the strength in the Tech Sector while the Dow Jones Industrial Average and the the S&P 500 finished the day lower. The was a decent rally in the Utility sector on Monday, though I could not find anything to really account for the rally in utility stocks. I generally believe it takes a couple of days following a major holiday for the market to return to some normalcy. I do not see this being any exception. I really tend to think that Monday was the 1st day of an approximately 3 day process of the market discovering its post Thanksgiving Holiday trend, and that by the end of Wednesday we will have a good idea of what is happening.
In the commodities markets, Oil was lower by $0.54 to $87.74 per barrel, and Gold was lower by $1.80 to $1,749.60 per ounce. In the grain markets, Wheat was higher by $0.012 to $8.490 per bushel, and Corn was higher by $0.016 to $7.472 per bushel, while Soybeans were higher by $0.060 to $14.246 per bushel.
A Few Thoughts on Tuesday’s Market: In looking at the charts from Monday’s market I see a continued move higher by the High Tech sector, and I think it is going to take another day or so of trading activity for the market to shake out. I do not see the situation in Europe being resolved with the latest agreement for Greece to reduce its budget deficit level; there is still a long way to go to return those countries to financial stability. Our own fiscal cliff situation is far from resolved. I think this sets up a situation where the overall market can easily drift lower over the course of the near term future.
The Dow Jones Industrial Average: The Dow Jones Industrial Average closed at 12,967.37 With the change over to decimalization of quotes and the increased use of computerized trading, support and resistance levels are not always as solid as they used to be. As a result they can be temporarily violated for a day or so before regaining their importance. Despite the fact that the Dow Jones Industrial Average closed above my upside resistance level 3 trading days ago, I am going to maintain my current upside resistance level on the Dow Jones Industrial Average for an another day or so to see if it the Dow moves back below it or not, and if I need to raise it or not. I still see upside resistance 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 5,084.49 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 1,406.29 I currently see upside resistance on the S&P 500 at 1,419.04 and downside support on the S&P 500 at 1,359.88 and then at 1,343.36 Current Expectations: I think the S&P 500 is going to move lower and test 1,359.88 and then 1,343.36 on a closing basis.
NASDAQ 100 Index ‘NDX’: The NDX closed yesterday at 2,651.67 I see upside resistance on the NDX currently at 2,655.81 and downside support at 2,524.36 on a closing basis. Current Expectations: I think the NDX is going to continue to move lower and test 2,524.36 and then 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.