A Few Thoughts After the Close:

The overall market moved sharply lower yesterday in a broad based selloff that saw every index I track move lower on the day.  The weakest the Airlines,  Retailers,  High Tech,  Cyclicals, Transports, and Banking indices. Bonds moved higher sending interest rates sharply lower.  Oil was lower by $1.10 to $93.79 per barrel, and Gold was sharply higher by $22.90 to 1,641.90 per ounce.

In looking at the charts from today’s on the various indices I track I noticed the following.

1. The Dow Jones Industrial Average down 266 points at 11,868.36.  In the July 12th edition of this blog with the Dow Jones Industrial Average at 12,446.88 I stated that I thought the Dow Jones Industrial Average would continue to move lower and test 11,934.58  The Dow  obviously closed below that level today, and below its 200 day moving average, which was at 11,944.09, in the process.  It looks to me that the Dow is starting a new intermediate downward movement.  I am expecting the Dow to continue to move lower and test support at 11,613.30  Granted that support level is only about 250 points away; if the Dow moves through that level of support, then I see the next point of support being 11,444.08
2. The Dow Jones Transportation Average also moved sharply lower and closed at 4,942.27 and below its 200 day moving average. In the July 12th edition of this blog with the Dow Jones Transportation Average having closed at 5,386.16 I stated that I thought the Dow Transports would move lower and test 5,060.59 With the Dow Transports having closed below that level today, I now see support 4,749.99  I am expecting the Dow Transports to continue to move lower and test this level
3. The S&P 500 closed at 1,254.05 today.  In the July 15th edition of this blog, with the S&P 500 having closed at 1,308.87 I stated that I expect the S&P 500 would continue to move lower and test 1,265.42.  The S&P obviously broke though support at the 1,265 level.  I am now expecting the S&P 500 to continue to move lower and test support at 1,225.85 If that level of support fails to hold, then I see the next level of downside support at 1,178.34
4. The Amex Pharmaceuticals Index ‘DRG’ closed below its 200 day moving average.  This index continues to look very bearish.
5. The MS Commodities Index ‘CRX’ closed at 960.20, below its 200 day moving average.  This index looks to continue to move lower and test 945.20  If that level of support fails to hold, then I expect it to continue to move lower and test 887.75
6. The S&P Healthcare Index ‘HCX’ closed at 379.01 in the process it closed below its 200 day moving average.  In the July 19th edition of this blog, with the ‘HCX’ having closed at 403.88 I stated that I expected it to continue to move lower and test 391.31.  With the ‘HCX’ having closed below that level, I am expecting the ‘HCX’ to continue to move lower and test support at 364.17
7. The S&P Chemicals Index ‘CEX’ closed at 311.21 and below its 200 day moving average.
8. In the July 19th edition of this blog I with the N.A. Telecom Index ‘XTC’ having closed at at 892.08 I stated that I expected the ‘XTC’ to continue to move lower and test 871.74  Today the ‘XTC’ closed at 858.61.  I am expecting the ‘XTC’ to continue to move lower and test support at 823.39

Overall, all the indices I looked at looked very bearish.  That is not to say the world is going to come to an end,  but it may be signaling the start of a new intermediate downward trend for the market.

I’ll take a look at the charts of the individual stocks and be back with my thoughts in the morning before the open.

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