A Few Thoughts on Friday’s Market: In looking at the charts from yesterday’s trading activity, the overall trend of the market continues to appear to be moving lower. I just do not see anything that is going to make th
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Sterling Market Commentary for Thursday October 11th, 2012
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A Few Thoughts on Thursday’s Market: In looking at the charts from yesterday’s trading activity, I noticed continued weakness in the vast majority of the indices I track. The Dow Jones Industrial Average, Philly Semiconductor Index ‘SOX’, the S&P 100 ‘OEX’, S&P 500 ‘SPX’, the S&P Retail Index ‘RLX’, the M.S. Cyclicals ‘CYC’, and Amex Biotech ‘BTK’ indices all either hit or move lower through their 40 day moving averages. Again, this is generally considered a negative trading signal for the market. While the computers may initially move the market higher this morning due to the initial jobless claims numbers, I do not think they are going to overcome a slowing economy. Let us not forget that initial jobless claims, and the unemployment rate are lagging indicators. This means that they are providing us with a picture of what has already happened. They are not forward looking looking indicators which will provide you with an indication of what may be happening now or in the future. The initial jobless claims and the unemployment numbers are not providing us with a picture of an improving economy, they are confirming that the economy improved in the past. The forward looking indicators are showing a slowing economy. Economic conditions around the world are contracting, the world economy is slowing, and there is a good chance the U.S. economy will drop back into a recession in the next 6 months. This is not a recipe for a rising market with interest rates already at record levels.
Sterling Market Commentary for Wednesday October 10th, 2012
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A Few Thoughts on Wednesday’s Market: In looking at the charts from yesterday’s trading activity I was struck by the apparent breakdown and weakness in the vast majority of the charts I looked at. While there is a good possibility several of these indices could bounce from these levels, another couple of down days will break the upward trend that has been in place since early summer and signal the start of a new downward trend. The charts of the various sector indices I track can be grouped into 3 basic categories. The 1st being the capitalization weighted tech indices that are very heavily weighted with Apple, Inc. ‘AAPL’. Due to the excessive weighting of Apple within these indices as Apple has moved lower, these indices have been dragged lower at a sharp paces. Basically a kind of “Live by the Sword, Die by the Sword” situation.
Sterling Market Commentary for Tuesday October 9th, 2012
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The Dow Jones Industrial Average: The Dow Jones Industrial Average closed at 13,610.15 In doing so, the Dow Jones Industrial Average completed a small cup pattern with a measured to 13,692.69 on a closing basis. I am now looking at upside resistance on the Dow Jones Industrial Average at 13,692.59 on a closing basis. I now see downside support coming in at and downside support at 13,406.91 on a closing basis. Current Expectations: I am expecting the Dow Jones Industrial Average to continue to move higher and test 13,692.59 on a closing basis.
Dow Jones Transportation Average: The Dow Jones Transportation Average closed at 5,0046.43. I 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.
The Bottom Line: I think the market will continue to trend sideways to lower for the next few trading sessions.
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Sterling Market Commentary for Monday October 8th, 2012
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A Look at Friday’s Market: The overall market moved moderately higher in a relatively broad based move. In the commodities market, Oil was lower by $1.83 to $89.88 per barrel, and Gold was lower by $15.70 to $1,780.80 per ounce. In the grain markets, Wheat was lower by $11.60 to $8.574 per bushel, and Corn was lower by $0.090 to $7.480 per bushel, while Soybeans were unchanged at $15.514 per bushel. Interestingly, the bond market saw a sharp sell off that moved interest rates higher across the various maturities. The yield on the 30-Year US Treasury Bond jumped 0.084% from 2.882% to 2.966% This is just under a 3% move in rates, and a 3% move in basically anything is a big move. The yield on the 5-Year and 10-Year US Treasury instruments made similar moves. While moves of this magnitude are not unheard of in the bond market; I think it does somewhat demonstrate the ineffectiveness of the Fed’s Quantitative Easing programs
Sterling Market Commentary for Friday October 5th, 2012
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Dow Jones Transportation Average: The Dow Jones Transportation Average closed at 5,012.71. I 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.
Sterling Market Commentary for Thursday October 4th, 2012
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The overall market moved moderately higher in a relatively broad based move. There were a few notable exceptions as the commodities based indices moved lower. A lot of this move lower was sparked by a sharp sell off in Oil, which was lower by $3.75 to $88.14 per barrel. In searching the news reports related to the sharp drop in the price of Oil, I found that it was attributed to 2 primary factors. The 1st being a slowing of the global economy, and the 2nd being a slowing of the Chinese economy. Neither of these things is good for the U.S. Economy and the overall market. In looking at a chart on the price of Oil it appears to me that their is a reasonable chance that the price of Oil could continue to move lower and test its support level of $79.01 per barrel set on June 28th of this year. While the lower price of Oil would be good for consumer’s pocket books, my concerns are that with all the computerized trading, the lower price Oil would be a sign of a significantly weakening global economy.
Sterling Market Commentary for Wednesday October 3rd, 2012
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The Dow Jones Industrial Average: The Dow Jones Industrial Average closed at 13,482.36 I continue to see upside resistance on the Dow at 13,558.92. With last Friday’s close of 13,437.13 the Dow Jones Industrial Average broke our support level of 13,345. I now see downside support coming in at and downside support at 13,279.32 Current Expectations: I am expecting the Dow to continue to trend lower and test 13,279.32 on a closing basis.
Sterling Market Commentary for Tuesday October 2nd, 2012
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A Look at Monday’s Market: The overall market was mixed on Monday with the S&P 500 and the Dow Jones Industrial Average finishing the day moderately higher while the NASDAQ finished the day slightly lower. Among the indices I track there was strength in the Airlines, Natural Gas, Gold/Silver, Biotech, Insurance, Healthcare related, Commodities, Transports, Retailers, and Financials. There was weakness in the Telecoms, High Tech, and Utilities. In the commodities markets, Oil was higher by $0.29 to $92.48 per barrel, and Gold was higher by $9.40 to $1,780.50 per ounce. In the Grain markets, Wheat was lower by $0.182 to $8.842 per bushel, while Corn was higher by $0.004 to $7.566 per bushel, and Soybeans were lower by a whopping $0.406 to $15.602 per bushel.
Sterling Weekly for the Week of October 1st, 2012 – 3rd Quarter Performance Report
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Since the previous edition of the Sterling Weekly, the Dow Jones Industrial Average rose 237.58 points or approximately 1.8% to close at 13,437.13 It has been a busy 6 months since I last published the Sterling Weekly, I am very happy to announce that during the last 6 months, my wife and I saw the birth of our 1st child, a very healthy baby boy that we are very excited to have in our lives. Over the course of that period of time the market has moved slightly higher. However the continued bond buying and quantitative easing policies of the Fed continues to cause me a great deal of concern; specifically that the Fed is creating a financial bubble unlike the world has ever seen before. I have concerns that when this bubble finally bursts there will be negative consequences that are devastating for the world economy.
We saw the end of the 3rd quarter last week. As usual, I like to take a look at the performance of the various sector indices I track and see what the market is telling us. I usually find these results somewhat interesting. I have published the results below for your review as well.