Market Commentary

Sterling Market Commentary for Thursday October 18th, 2012

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Sterling Market Commentary for Thursday October 18th, 2012

A Look at Wednesday’s Market: The overall market moved moderately higher yesterday in a broad based move that saw several of the various sector indices I track demonstrate strong moves higher.  In particular,  the Amex Broker/Dealer ‘XBD’, the MS Commodities ‘CRX’, the S&P Chemicals ‘CEX’, the Oil Services ‘OSX’, the S&P Insurance ‘IUX’, and Amex Oil & Gas ‘XOI’, and the MS Cyclicals ‘CYC’ all put in solid performances yesterday.  In the commodities markets, Oil was higher by $0.05 to $92.59 per barrel, and Gold was higher by $6.70 to $1,753.00 per ounce.  In the grain markets,  Wheat was higher by $0.084 to $8.562 per bushel, while Corn was higher by $0.072 to $7.454 per bushel, and Soybeans were higher by $0.154 to $15.092 per bushel.

A Few Thoughts on Thursday’s Market:  In looking at the charts from yesterday’s trading, one of the key things I noticed was many of the various sector indices I track have staged a significant rebound over the last couple of trading sessions.  Despite my concerns about the Fed’s attempts to manipulate the market through its Quantitative Easing programs, it now looks like the market is poised to move higher.  We have recently seen some positive economic reports,  however I would like to caution our readers that those reports are from lagging economic indicators.  They are showing that the economy has already improved, not what it is expected to do in the future.

The Dow Jones Industrial Average: The Dow Jones Industrial Average closed at 13,557.00  With yesterday’s trading activity, I am now widening trading range by raising my upside resistance to the closing high set earlier this month.  I am now looking at upside resistance on the Dow Jones Industrial Average at 13,610.15 on a closing basis.  I now see downside support coming in at 13,273.32 and then  13,000.71 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 13,373.32 on a closing basis.

Dow Jones Transportation Average:  The Dow Jones Transportation Average closed at 5,148.70.  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.

www.sterlinginvestments.com

Market Commentary

Sterling Market Commentary for Wednesday October 17th, 2012

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Sterling Market Commentary for Wednesday October 17th, 2012

A Look at Tuesday’s Market:  The overall market moved sharply higher in a broad based move that saw the vast majority of the sector indices I track move higher on the day as well.  The strongest sectors were the Chemicals, High Tech,  Gold/Silver, Oil & Gas, Cyclicals, Commodities, and Healthcare related indices.  Only the Banking indices moved lower on the day.  That move could be attributed to the resignation of Vikram Pandit from Citibank ‘C’.  In the commodities markets,  Oil was higher by $0.08 to $92.94 per barrel, and Gold was higher by $8.70 to $1,746.30 per ounce.  In the grain markets, Wheat was lower by $0.40 to $8.476 per bushel, and Corn was higher by $0.010 o $7.382 per bushel, while Soybeans were higher by $0.012 to $14.936 per bushel.

A Few Thoughts on Wednesday’s Market:  In looking at the charts from yesterday’s trading activity I was surprised by the strength of the move higher in a couple of sectors including the Chemicals, High Tech, and Healthcare related indices.  The problem I am having today  in particular is that I do not have any faith in the market at this point in time.  I think that we are currently in a situation where the Fed through its Quantitative Easing programs is actively manipulating the market to artificially high levels.  Why do I say this?  Because the Fed has stated that the goals of its Quantitative Easing programs is to flood the bond market with liquidity and drive investors into other classes of savings and investments, and along the way raise asset valuations.  In other words their stated goal is to manipulate markets higher.  I also believe they are creating a bubble in the bond market that when it bursts will make the bursting of the housing bubble look like a party.  Through in the political uncertainty and the effects of computerized trading, and I think you have a market that could suddenly without warning sharply reverse itself.  David Vitner, the CFO of Goldman Sachs was quoted in this morning’s Wall Street Journal as saying “There is still so much political uncertainty out there that is driving markets.  A speech by Politician X or Politician Y drives markets up or down as much as any economic situation.”  If nothing else,  I guess I am not out there alone in my feelings.

The Dow Jones Industrial Average: The Dow Jones Industrial Average closed at 13,551.78   With yesterday’s trading activity, I am now widening trading range by raising my upside resistance to the closing high set earlier this month.  I am now looking at upside resistance on the Dow Jones Industrial Average at 13,610.15 on a closing basis.  I now see downside support coming in at 13,273.32 and then  13,000.71 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 13,373.32 on a closing basis.

Dow Jones Transportation Average:  The Dow Jones Transportation Average closed at 5,118.87.  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.

www.sterlinginvestments.com

Market Commentary

Sterling Market Commentary for Tuesday October 16th, 2012

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Sterling Market Commentary for Tuesday October 16th, 2012

A Look at Monday’s Market:  The overall market moved moderately higher in a broad based move that saw essential sector index I track move higher as well.  The move higher was attributed to stronger than expected retail sales.  Welcome to the Age of Computers, when a single number can move markets world wide.  As someone who has been actively involved in the markets for a long time, this seems more than a little unnatural to me.  It brings back the old adage of “Live by the sword, die by the sword.” While this may seem good on the way up, it can reverse and turn ugly just as quickly, if not faster.  in the commodities markets,  Oil was lower by $0.01 to $91.85 per barrel, and Gold was lower by $22.10 to $1,737.60 per ounce.  In the grain markets,  Wheat was lower by $0.084 to $8.482 per bushel, and Corn was lower by $0.154 to $7.372 per bushel, while Soybeans were lower by $0.30 to $14.924 per bushel.

A Few Thoughts on Tuesday’s Market:  In looking at the charts from yesterday’s trading, I noticed that despite yesterday’s strong and broad based move upwards, most of the charts I looked at really only saw a return to their 9-Day moving average.  This is far short of any sort of market rally.  In my opinion the slow downward trend that we have recently been experiencing is still in place.  I think the focus will continue to be on tonight’s Presidential debate.

The Dow Jones Industrial Average: The Dow Jones Industrial Average closed at 13,424.23   I am now looking at upside resistance on the Dow Jones Industrial Average at 13,485.97 on a closing basis.   I now see downside support coming in at 13,273.32 and then  13,000.71 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 13,373.32 on a closing basis.

Dow Jones Transportation Average:  The Dow Jones Transportation Average closed at 5,065.47.  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.

www.sterlinginvestments.com

Market Commentary

Sterling Market Commentary for Monday October 15th, 2012

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Sterling Market Commentary for Monday October 15th, 2012

A Look at Friday’s Market:  The overall market finished Friday mixed with the Dow Jones Industrial Average closing slightly higher while the S&P 500 closed slightly lower.  In the commodities markets, Oil was lower by $0.21 to $91.86 per barrel, and Gold was lower by $10.90 to $1,759.70 per ounce.  In the grain markets, Wheat was lower by $0.292 to $8.566 per bushel, and Corn was lower by $0.204 to $7.526 per bushel, while Soybeans were lower by $0.260 to $15.224 per bushel.  While I could not find any specific reason to account for the sharp move lower in the grain markets, it appears to have been part of a much broader move in the overall commodities markets.

A Few Thoughts on Monday’s Market:  In looking at the charts from Friday’s market I noticed a couple of items of interest.  The 1st being that the majority of the various sector indices I track appear to continue to be moving lower.  The Amex Gold/Silver Index ‘XAU’, the S&P Chemicals Index ‘CEX’ and the Amex Oil & Gas Index ‘XOI’ (which touched its 200 day moving average on Friday) all appear to be in the process of breaking support and heading lower.  The banking indices, the S&P Banking Index ‘BIX’ and the KBW Banking Index ‘BKW’ both sold off sharply on Friday.  The ‘BIX’ broke below an upward sloping trendline that had provided support and looks to be starting a new downturn.  While the ‘BKW’ is right on the its upward sloping trendline.  Another down day in the banking stocks and we could see some real the start of an intermediate downtrend in these stocks.  As far as the overall market goes,  I am expecting a lackluster, with a slight downward bias, pair of trading days prior to Tuesday night’s Presidential debate.

The Dow Jones Industrial Average: The Dow Jones Industrial Average closed at 13,328.85   I am now looking at upside resistance on the Dow Jones Industrial Average at 13,406.91 on a closing basis.   I now see downside support coming in at 13,273.32 and then  13,000.71 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 13,373.32 on a closing basis.

Dow Jones Transportation Average:  The Dow Jones Transportation Average closed at 5,044.63.  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.

www.sterlinginvestments.com

Market Commentary

Sterling Market Commentary for Friday October 12th, 2012

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Sterling Market Commentary for Friday October 12th, 2012

A Look at Thursday’s Market:  The overall market moved slightly lower yesterday in a broad based move that saw the majority of the sector indices I track drift lower.  This is despite a day in which initial jobless claims was reported as being sharply lower.  However, I should point out that I saw a news report this morning where the Labor Department stated that a large state failed to report its initial jobless claims numbers.  Therefore I would look for this week’s jobless claims to be revised higher, and for the number of initial jobless claims reported next week to be rebound back higher.  In the commodities markets,  Oil was higher by $0.82 to $92.07 per barrel, and Gold was higher by $5.50 to $1,770.60 per ounce.  In the grain markets, Wheat was higher by $0.162 to $8.860 per bushel, and Corn was higher by $0.364 to $7.732 per bushel, while Soybeans were higher by $0.252 to $15.484 per bushel.

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 that change.  I think that we are going to see a fair amount of people sitting on the sidelines prior to Tuesday’s upcoming Presidential Debate.

The Dow Jones Industrial Average: The Dow Jones Industrial Average closed at 13,326.39 With yesterday’s move the Dow Jones Industrial Average broke through 2 supporting trendlines and closed below our previous support level of 13,406.91  I am now looking at upside resistance on the Dow Jones Industrial Average at 13,406.91 on a closing basis. I now see downside support coming in at 13,273.32 and then  13,000.71 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 13,373.32 on a closing basis.

Dow Jones Transportation Average:  The Dow Jones Transportation Average closed at 5,000.46.  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.

www.sterlinginvestments.com

Market Commentary

Sterling Market Commentary for Thursday October 11th, 2012

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Sterling Market Commentary for Thursday October 11th, 2012

A Look at Wednesday’s Market:  The overall market move sharply lower in a broad based move that saw nearly every sector index I track move lower on the day  as well.  The weakest sectors were the High Tech,  Oil Services, Retailers, Biotech, Chemicals, Natural Gas, Airlines, Cyclicals, Commodities, and Healthcare related indices.  There was strength in the Gold/Silver, and Banking indices. The weakness in the market was sparked by a weakness in corporate earnings, which is a further sign of a weakening U.S. economy.  In the commodities markets, Oil was lower by $1.14 to $91.25 per barrel, and Gold was higher by $0.10 to $1,765.10 per ounce.  In the grain markets,  Wheat was higher by $0.054 to $8.696 per bushel, and Corn was lower by $0.052 to $7.366 per bushel, while Soybeans were lower by $0.266 to $15.252 per bushel.

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.

The Dow Jones Industrial Average: The Dow Jones Industrial Average closed at 13,344.97 With yesterday’s move the Dow Jones Industrial Average broke through 2 supporting trendlines and closed below our previous support level of 13,406.91  I am now looking at upside resistance on the Dow Jones Industrial Average at 13,406.91 on a closing basis.  I now see downside support coming in at 13,273.32 and then  13,000.71 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 13,373.32 on a closing basis.

Dow Jones Transportation Average:  The Dow Jones Transportation Average closed at 5,006.09.  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.

www.sterlinginvestments.com