Sterling Stock Market Commentary for Monday June 10th, 2013
A Look at the Market Since Our Last Update: The overall market moved sharply higher on Thursday and Friday of last week. It might be tempting to think that with the moves on Thursday and Friday a new move higher has started. However, I would like to point out that despite the strong moves on Thursday and Friday, the Dow Jones Industrial Average basically moved back to its 9-day moving average; in other words it basically just recovered from an “over-sold” position. The same can be said for the S&P 500 and the NASDAQ 100 index. Meanwhile, yields on the 5, 10, and 30 year bonds set new short term highs. In the commodities markets, Oil closed Friday at $96.03, up $1.27 on the day; and basically at its highest level in over a week. Gold closed Friday at $13,383.00 down $32.80 on the day; basically it looks like Gold is in the process of retesting its yearly lows. In the grain markets, Wheat was lower by $0.014 at $6.962 per bushel, and Corn was higher by $0.030 to $6.662 per bushel, while Soybeans were higher by $0.010 to $15.282 per bushel.
A Few Thoughts on the Upcoming Market: In looking at the charts from Friday’s trading a couple of charts stood out. The 1st and most interesting is the rise in interest rates, as typically interest rates and equities do not move in the same direction. The 2nd point of interest is the Amex Broker/Dealers Index ‘XBD’, which set a new multi-year high on Friday. I found this interesting because it has been a long time since the ‘XBD’ has been a market leader of any sort. However, it looks like it is close to trading at its highest level since the “bear market” resulting from the Financial Crisis of 2008. I will try to take a closer look at the Broker/Dealer index tonight and see what I can find out. Hopefully I will have an update in tomorrow’s edition of the Sterling Market Commentary.
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