The Dow Jones Industrial Average closed lower yesterday at 12,385.16 Oil was lower by $1.35 to $96.25 per barrel, and Gold was higher by $12.30 to $1,602.40 per ounce.
A Thought Before the Open:
In looking at the charts from yesterday’s trading activity I have the following thoughts.
- Despite the pre-market futures being higher this morning, with the exception of the gold indices, the chart patterns on every index I track are looking negative with several indices breaking below their 40 day moving averages.
- The very vast majority of the high volume stocks have negative chart patterns, however some positive earnings announcements could change that.
- The KBW Banking Index ‘BKX’ closed yesterday at 45.63 In the process it closed below support set in early June and also set a new 2011 closing low. My thoughts are that we could see another approximately 10% decline to support at roughly 41.70
- The S&P 500 ‘SPX’ closed at 1,305.44 and below its 40 day moving average. This is a bearish sign. I am expecting the S&P 500 ‘SPX’ to continue to move lower and test 1,265.42 on a closing basis.
- The Amex Pharmaceuticals Index ‘DRG’ closed at 327.92, below its 40 Day moving average. This is bearish trading signal.
- The S&P Healthcare Index ‘HCX’ closed at 403.88, below its 40 day moving average. This is a bearish trading signal. I see support coming in at 401.01. If the ‘HCX’ breaks below that level, then I think we could see a pullback down to 391.31
- The N.A. Telecom Index ‘XTC’ closed at 892.08, below its 200 day moving average. This is a bearish signal. I see downside support coming in at 871.74
- The Morgan Stanley Cyclical Index ‘CYC’ closed at 1,054.76, below its 40 day moving average. This is a bearish signal. I see downside support coming in at 1,008.27