Sterling Market Commentary for Tuesday October 16th, 2012

Sterling Market Commentary for Tuesday October 16th, 2012

A Look at Monday’s Market:  The overall market moved moderately higher in a broad based move that saw essential sector index I track move higher as well.  The move higher was attributed to stronger than expected retail sales.  Welcome to the Age of Computers, when a single number can move markets world wide.  As someone who has been actively involved in the markets for a long time, this seems more than a little unnatural to me.  It brings back the old adage of “Live by the sword, die by the sword.” While this may seem good on the way up, it can reverse and turn ugly just as quickly, if not faster.  in the commodities markets,  Oil was lower by $0.01 to $91.85 per barrel, and Gold was lower by $22.10 to $1,737.60 per ounce.  In the grain markets,  Wheat was lower by $0.084 to $8.482 per bushel, and Corn was lower by $0.154 to $7.372 per bushel, while Soybeans were lower by $0.30 to $14.924 per bushel.

A Few Thoughts on Tuesday’s Market:  In looking at the charts from yesterday’s trading, I noticed that despite yesterday’s strong and broad based move upwards, most of the charts I looked at really only saw a return to their 9-Day moving average.  This is far short of any sort of market rally.  In my opinion the slow downward trend that we have recently been experiencing is still in place.  I think the focus will continue to be on tonight’s Presidential debate.

The Dow Jones Industrial Average: The Dow Jones Industrial Average closed at 13,424.23   I am now looking at upside resistance on the Dow Jones Industrial Average at 13,485.97 on a closing basis.   I now see downside support coming in at 13,273.32 and then  13,000.71 on a closing basis.   Current Expectations:  I think we are starting a new trend lower in the Dow.  I am expecting the Dow Jones Industrial Average to continue to move lower and test 13,373.32 on a closing basis.

Dow Jones Transportation Average:  The Dow Jones Transportation Average closed at 5,065.47.  I see upside resistance on the the Dow Transportation Average at 5,215.97 and downside support at 4,873.76  and then at 4,795.28.  Current Expectations:  I think the Dow Transports are going to track sideways between support and resistance for the foreseeable future.

The Bottom Line:  I think the market will continue to trend sideways to lower for the next few trading sessions.