A Few Thoughts Before the Open:
As we prepare to start this Tuesday following the Labor Day holiday we find that world stock markets were under pressure Monday while we in the U.S. had the day off. Both Asian and European markets sold off on Monday as concerns over a slowing global economy continue to worry investors.
As I write this, the pre-market futures are sharply lower here in the U.S. In looking at a chart of the Dow Jones Industrial Average on a slightly longer-term basis it looks to me like following the “flash-crash” last summer the Dow basically had 3 runs (or legs) at moving higher and now entered what is at least going to be a short-term pullback or quite possible an intermediate move lower. Unfortunately, I see a real good chance the Dow Jones Industrial Average will continue to move lower and test the 9,500 level.
In looking at the various indices I track, I have the following comments.
Dow Jones Industrial Average: The Dow Jones Industrials closed at 11,240.26 The Dow sold off on Friday and closed below its 8-day moving average. I currently see upside resistance on the Dow at 11,493.57 and downside support at 10,719.94 on a closing basis. I am currently expecting the Dow to continue to move lower and test its downside support at 10,719.94 on a closing basis.
S&P 500 ‘SPX’: The S&P 500 closed at 1,173.97 I see upside resistance on the S&P 500 at 1,218.89 and downside support at 1,127.79 on a closing basis. I am currently expecting the S&P 500 to continue to move lower and test 1,127.97 on a closing basis.
NASDAQ 100 Index ‘NDX’: The NASDAQ 100 closed at 2,167.83 I continue to see downside support on the NDX at 2,100 and upside resistance at 2,292.34.
The Dow Jones Transportation Average: The Dow Transports closed at 4,445.32 I see upside resistance on the Dow Transports at 4,683.96 and downside support level at 4,320.05 on a closing basis. I am currently expecting the Dow Transports to continue to move lower and test 4,320.05 on a closing basis.
M.S. Commodities Related Equity Index ‘CRX’: The ‘CRX’ closed at 888.25. I see upside resistance on the ‘CRX’ at 924.89 and downside support at 847.10
KBW Banking Index ‘BKW: The ‘BKW’ closed at 37.00. I see upside resistance on the ‘BKW’ at 41.42 and downside support at approximately 35.10 on a closing basis.
S&P Banking Index ‘BIX’: The ‘BIX’ closed 111.98. I see upside resistance on the ‘BIX’ at 117.52 and downside support at 100.96 on a closing basis.
Amex Broker/Dealer Index ‘XBD’: The ‘XBD’ closed at 86.35 I see upside resistance at 92.97 and downside support at 80.87 on a closing basis. I am expecting the ‘XBD” to continue to move lower and test 80.87 on a closing basis.
S&P Insurance Index ‘IUX’: The ‘IUX’ closed at 156.09 I see upside resistance on the ‘IUX’ at 175.13 and downside support at 143.80 on a closing basis. I am currently expecting the ‘IUX’ to continue to move lower and test 143.80 on a closing basis.
Amex Gold & Silver Index: The Amex Gold & Silver Index ‘XAU’ closed at 222.79 I see upside resistance on the ‘XAU’ at 228.95 and downside support at 220.36 I am expecting the ‘XAU’ to continue to move higher and test 228.95 on a closing basis.
Amex Oil & Gas Index: The Amex Oil & Gas Index closed at 1,123.37 I currently see upside resistance on the ‘XOI’ at 1,141.92 on a closing basis and downside support at 1,050.78. I am expecting the ‘XOI’ to continue to move lower and test 1,050.78 on a closing basis.
M.S. Cyclicals Index: The M.S. Cyclicals Index ‘CYC’ closed yesterday at 835.62 I currently see upside resistance on the ‘CYC’ at 868.97 and downside support at 789.46 on a closing basis. I am currently expecting the ‘CYC’ to continue to move lower and test 789.46 on a closing basis.
M.S. Consumer Index: The M.S. Consumer Index ‘CMR’ closed at 702.67 I currently see upside resistance on the ‘CMR’ at 725.78. and downside support at 691.44 on a closing basis.