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 and downside support at 13,273.32 and then 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……..
Market Commentary
Sterling Investment Services blog providing stock market commentary. Our daily topics include a look at the prior day’s market activity, our thoughts on the upcoming trading day. Additionally we provide support and resistance points, as well as expected direction of movement for the major market indices including the Dow Jones Industrial Average, S&P 500, NASDAQ 100, and the Dow Jones Transportation Average.
Sterling Market Commentary for Wednesday October 17th, 2012
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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. ……………
Sterling Market Commentary for Tuesday October 16th, 2012
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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. ……..
Sterling Market Commentary for Monday October 15th, 2012
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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.
Sterling Market Commentary for Friday October 12th, 2012
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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
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.