Sterling Market Commentary for October 18th, 2011

A Look at Monday’s Activity:  The overall market moved sharply lower Monday in a broad based move that saw every sector index I track move lower on the day.  The weakest sectors were the Banking,  Oil Services, Cyclicals, High Tech, Insurance,  Commodities, Broker/Dealers,  and Transports.  The Dow Jones Industrial Average was lower by 212 points.  Among the Dow 30 the weakest stocks were Alcoa,  Hewlett-Packard, 3M, and United Technologies.  In the commodity sector,  Oil was lower by $0.38 to $86.62 per barrel, and Gold was lower by $6.40 to $1,676.60 per ounce.  In the grains,  Wheat was higher by $0.014 to $6.242 per bushel, and Corn was higher by $0.004 to $6.404 per bushel, while Soybeans were lower by $0.17 to $12.53 per bushel.

A Few Thoughts Before the Open:  In looking at the charts from Monday’s trading I have the following thoughts and comments.

1.  Trading volume continues to be weak.  As a result I am skeptical of all moves in the market.

2.  Never short a dull market.

3.  After reading an article in the Wall Street Journal about Belgium’s share of the bailout of its most recent bank to fail.  The tab came in at almost 15% of the Belgium’s GDP.  Maybe the problem isn’t that these banks are too big to fail (that’s another topic) but that these banks are too big for the countries they call home.

The Bottom Line:  It’s earnings season, the announcements from a few key companies can easily move the market right now; and my thoughts are the market will probably drift lower.