A Look at Tuesday’s Activity: The overall market was sharply higher in a broad based move that saw basically every sector index I track move higher on the exception of the Banking, Retailers, and Airlines. The strongest sectors were the High Tech, Chemicals, Cyclicals, Natural Gas, Transports and Commodities. There was weakness in bonds as interest rates moved higher on the day. Oil was sharply higher by $4.21 to close at $84.45 per barrel. There was a late day report on CNBC that an oil sheen in the Gulf of Mexico could be from the BP Macondo well, but that was later refuted by the U.S. Coast Guard. Gold was higher by $57.90 to $1,650.60 per ounce. Wheat was higher by $0.10 to $6.582 per bushel, while Corn was higher by $0.042 to $6.522 per bushel, and Soybeans were higher by $0.032 to $12,63 per bushel.
At one point yesterday, the Dow Jones Industrial Average was higher by almost 300 points when news hit that there might be some snags in the Greek bailout and the Dow Jones Industrial Average promptly sold off 200 points before recovering 50 of them to finish the day up 150 points. Among the gainers in the Dow Jones Industrial Average, Hewlett-Packard, Disney, and Occidental Petroleum posted the best percentage gains.
A Few Thoughts Before the Open: Having completed my look at the charts of the indices I track, I saw nothing that looked like it was in the midst of any sort of rally. In fact despite a couple of days of impressive move, the Dow Jones Industrial Average basically managed to only make it back to its 9-day moving average, neutral territory in my opinion. Also, we should not forget that yesterday was the last day of the month to execute trades that settle in the month of September, so we very could have seen a Window Dressing come into play the last couple of days where it would have been a big factor in moving the market higher.
I continue to maintain our opinion that the overall market is in a sideways trend with a downward bias. Until we see the Dow Jones Industrial close above 11,613.53 we believe that sideways trend remains in place. Remember the 1st Rule of Trend, a trend remains in place until it is broken.
I think we could see some jockeying for position today as we have a major economic release tomorrow in the form of Gross Domestic Product (GDP) and initial claims. This could easily move the market, as well could Personal Income and Spending numbers to be released on Friday.