Sterling Market Commentary for Wednesday January 25th, 2012

A Look at Tuesday’s Market:  The overall market finished Tuesday mixed with the NASDAQ finishing slightly higher, while the Dow Jones Industrial Average and the S&P 500 finishing slightly lower on the day.  In looking at the sectors I follow, there was strength in the Disk Drive Manufacturers, Biotech, Networking, Airlines, Oil Services, High Tech, Retailers, Healthcare Providers, Cyclicals, and Chemicals.  There was weakness in the Gold stocks, Natural Gas, Broker/Dealers, Telecom, Utilities, Commodities, Insurance, Banking, Transports, Consumers, and Oil & Gas stocks. In the commodity markets, Oil was lower by $0.63 to $98.25 per barrel, while Gold was lower by $13.80 to $1,664.50 per ounce.  In the grain markets, Wheat was higher by $0.136 to $6.334 per bushel, and Corn was higher by $0.102 to $6.302 per bushel, while Soybeans were higher by $0.024 to $12.20 per bushel.

A Few Thoughts on Wednesday’s Market:  In looking at the charts from yesterday’s trading activity I  noticed that it looks like the NASDAQ 100 ‘NDX’ has entered an area of upside resistance that could be tough to get through.   Additionally the very vast majority of the sector indices I track are not confirming the move higher by the Dow Jones Industrial Average.  Granted I expect the NASDAQ to be higher today due to the incredible earnings by Apple, Inc. ‘AAPL’.  However,  Apple is not the entire economy; and I would like to propose that Apple is very unique in the minds of investors and consumers.  I think the bigger influence on the market will be the populist tone of last night’s State of the Union speech by President Obama.  I consider all this Populist talk to be very detrimental to the economy and the market.  I think the nastiness of this campaign season is going to be very negative for the 1st half of the year.

The Bottom Line:  While the trend of the stock market remains higher, and a trend remains in place until it it broken; I have concerns that we may be entering turning point in the stock market where it may turn lower.  I think time will tell, and we should know within the next few trading days.