Market Commentary

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. ……………

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 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

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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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

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.