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.

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Sterling Market Commentary for Wednesday August 15th, 2012

August 15, 2012 sterlinginvestments 0

One of the things I noticed in my review of the charts from yesterday’s market was that the Dow Jones Transportation Average has not really participated in the market’s move higher this year. While the Dow Jones Industrial Average is higher by approximately 7.8% year to date; the Dow Jones Transportation Average is higher by only 62.09 points or approximately 1.24% year to date. For those who follow the Dow Theory and the relationship between the Dow Jones Industrial Average and the Dow Jones Transportation Average, the lack of movement in the Dow Transportation Average is a significant signal. For me, this usually signals that either the Dow Jones Transportation Average is going to move sharply higher and play a game of catch up; or there is a significant risk that the Dow Jones Industrial Average will move back lower and give up the majority of its year to date gains.

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Sterling Market Commentary for Monday August 13th, 2012

August 13, 2012 sterlinginvestments 0

I would not get too excited about the Dow Jones Industrial Average’s recent move above 13,000. On March 15th of this year the Dow Jones Industrial Average closed at 13,252.76 only to move back lower. On April 2nd of this year the Dow Jones Industrial Average closed at 13,264.49 only to move back lower. On May 1st of this year, the Dow Jones Industrial closed at 13,279.32 I think this forms an upward sloping trendline that is upside resistance. At the current levels, I see this resistance coming into play at approximately 13,330 on the Dow Jones Industrial Average. Until the Dow Jones Industrial Average closes above this level, I would not get too excited about the current move higher.

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Sterling Market Commentary for Friday April 13th, 2012

April 13, 2012 sterlinginvestments 0

The overall market moved sharply higher in a broad based move that saw basically every index I track move higher on the day. Thursday’s move in my opinion was nothing more than a bounce from the previous move lower, and was probably exaggerated to the upside by comments from the Fed about the possibility of continuing quantitative easing and greater than expected jobless claims. It is a sad state of world affairs where comments about maintaining emergency level fiscal stimulus is having such an impact over 3 1/2 years after the financial crisis of 2008. It is also a sad commentary on the market when so much of the activity is controlled by computers trolling the news wires for headlines to base their trading decisions on. Think about for a minute. This creates a market where the activities of a young writer, with no market experience at one of the networks or newspapers could influence the direction of the market by their mood of the morning. It also is a sign that fewer and fewer of the market participants are actually able to think for themselves. This can’t be a good thing in the long run.

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Sterling Marekt Commentary for Wednesday April 11th, 2012

April 11, 2012 sterlinginvestments 0

A Few Thoughts on Wednesday’s Market: In looking at the charts from Tuesday’s trading activity I noticed a couple of items of significance. The 1st being that volume increased significantly on Tuesday. Heavy volume on the way lower is always considered a bearish trading signal for the markets. The other significant item I noticed was that the very vast majority of the indices and individual stocks I looked at broke through support during their moves lower. This break below support was significant enough that even a 100 point move higher in the Dow Jones Industrial Average will not get many of these stocks back above those support levels, which are now upside resistance levels.

While early morning futures are looking positive, I do not see any move higher today being much more than a bounce before the market moves back lower. I am going to be looking for a covered put position to enter for this morning’s trade.

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Sterling Market Commentary for Wednesday April 4th, 2012

April 4, 2012 sterlinginvestments 0

After looking at the charts from Tuesday’s trading activity, it is somewhat surprising the turnaround. Despite the moderate move lower in yesterday’s market, the vast majority of the heavy volume stocks I looked at showed negative chart patterns. I attribute this to two primary factors. The 1st being the statements from the Fed that there will probably not be any additional quantitative easing, and the second being that the call for Apple to move to $1,001 per share, said that a big portion of the increase in value in Apple would come from market share gains at the expense of its competitors. Not good to be those guys, and as a result, Apple went higher, while many of the high tech indices went lower.

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Sterling Market Commentary for Tuesday April 3rd, 2012

April 3, 2012 sterlinginvestments 0

The overall market moved moderately higher on Monday and showed broad based strength in the process as the majority of the various sector indices I track moved higher, displaying solid chart patterns in the process. It has been a long time since I felt the overall market showed the strength that I saw in Monday’s charts. I am looking for the overall market to continue to move higher. In looking at a chart of the Dow Jones Industrial Average, I see that it completed a “cup pattern” in late February with a measured move to 14,955.78 While I do not expect the move to 14,955.78 to be in a straight line, and I expect at least 1 pullback along the way, I am now setting our new intermediate to long term target on the Dow Jones Industrial Average at 14,955.78

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Sterling Market Commentary for Monday March 26th, 2012

March 26, 2012 sterlinginvestments 0

A Look at Friday’s Market: The overall market finished Friday moderately higher in a relatively broad based move that saw the vast majority of the sector indices I track move higher on the day as well. There was strength in the Gold/Silver, Oil Services, Airlines, Chemicals, Broker/Dealers, Natural Gas, Oil & Gas, Banking, Biotech, Transports, Consumer, High Tech, and Retailers. There was weakness in the Telecom and Dow Jones Transportation Average. There was strength in the bond markets as interest rates moved lower. In the commodities markets, Oil was higher by $1.52 to $106.87 per barrel, and Gold was higher by $19.90 to $1,662.40 per ounce. In the grain markets, Wheat was higher by $0.080 to $6.542 per bushel, and Corn was higher by $0.020 to $6.464 per bushel, while Soybeans were higher by $0.162 to $13.656 per bushel.

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Sterling Market Commentary for Tuesday March 20th, 2012

March 20, 2012 sterlinginvestments 0

A Few Thoughts on Tuesday’s Markets: In looking at the charts from yesterday’s market, I noticed that the vast majority of the sector indices and heavy volume stocks that I follow all looked very positive on their charts. However, I am always cautious the 1st couple of days following an options expiration week. Experience has taught me that it generally takes a day or so, for the underlying trend to resume its movement. As a result, I expect the activity of Tuesday and Wednesday to set the general direction of the market for the next few weeks. Also, in general we have been in a very tight trading range for the last several months. We all know that this is rather unusual given the trading history of the markets over the last couple of years. My underlying concern is that the longer we track sideways, the greater the move to either the up or downside will be when we finally break from this tight trading range; and I do not want to be caught to heavily weighted to the wrong side.