Market Commentary – July 19th, 2011

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.

  1. 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.
  2. The very vast majority of the high volume stocks have negative chart patterns,  however some positive earnings announcements could change that.
  3. 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
  4. 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.
  5. The Amex Pharmaceuticals Index ‘DRG’ closed at 327.92, below its 40 Day moving average.  This is bearish trading signal.
  6. 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
  7. 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
  8. 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

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit is exhausted. Please reload CAPTCHA.