A Few Thoughts on Monday’s Market: The major market indices and a large number of the various sector indices that I track are obviously benefiting from the Fed’s 3rd round of quantitative easing, otherwise known as QE3. However to be very clear, I consider QE3, and the previously quantitative easings’, QE1 and QE2, to be an unprecedented form of market manipulation that is not only ineffective, but one that has very serious, negative unintended consequences that are detrimental to the US Economy. Manipulating interest rates to artificially low levels will not make up for bad fiscal policy out of our elected officials in Washington, DC. Worse yet, these artificially low interest rates are creating a bubble in all bond classes as savers either search for higher yields or safety; these artificially low interest rates punish savers with reduced interest income, and create a sense of uncertainty that is holding back business development. It seams that the only group benefiting from these artificially low interest rates is the largest companies in the US and global economy. These are the companies that dominate the major market indices; and that is why these indices are doing so well, while the rest of the economy is seems to be disconnected from the stock market.
Tag Archive for Dow Jones Industrial Average
Sterling Market Commentary for Monday August 13th, 2012
by sterlinginvestments • • 0 Comments
I would not get too excited about the Dow Jones Industrial Average’s recent move above 13,000. On March 15th of this year the Dow Jones Industrial Average closed at 13,252.76 only to move back lower. On April 2nd of this year the Dow Jones Industrial Average closed at 13,264.49 only to move back lower. On May 1st of this year, the Dow Jones Industrial closed at 13,279.32 I think this forms an upward sloping trendline that is upside resistance. At the current levels, I see this resistance coming into play at approximately 13,330 on the Dow Jones Industrial Average. Until the Dow Jones Industrial Average closes above this level, I would not get too excited about the current move higher.
Sterling Market Commentary for Friday April 13th, 2012
by sterlinginvestments • • 0 Comments
The overall market moved sharply higher in a broad based move that saw basically every index I track move higher on the day. Thursday’s move in my opinion was nothing more than a bounce from the previous move lower, and was probably exaggerated to the upside by comments from the Fed about the possibility of continuing quantitative easing and greater than expected jobless claims. It is a sad state of world affairs where comments about maintaining emergency level fiscal stimulus is having such an impact over 3 1/2 years after the financial crisis of 2008. It is also a sad commentary on the market when so much of the activity is controlled by computers trolling the news wires for headlines to base their trading decisions on. Think about for a minute. This creates a market where the activities of a young writer, with no market experience at one of the networks or newspapers could influence the direction of the market by their mood of the morning. It also is a sign that fewer and fewer of the market participants are actually able to think for themselves. This can’t be a good thing in the long run.
Sterling Investments Market Commentary for Thursday April 12th, 2012
by sterlinginvestments • • 0 Comments
A Look at Wednesday’s Market: The overall market finished Wednesday moderately higher in a broad based move that saw the majority of the various sector indices I track move higher on the day as well. However, one day does not…
Sterling Marekt Commentary for Wednesday April 11th, 2012
by sterlinginvestments • • 0 Comments
A Few Thoughts on Wednesday’s Market: In looking at the charts from Tuesday’s trading activity I noticed a couple of items of significance. The 1st being that volume increased significantly on Tuesday. Heavy volume on the way lower is always considered a bearish trading signal for the markets. The other significant item I noticed was that the very vast majority of the indices and individual stocks I looked at broke through support during their moves lower. This break below support was significant enough that even a 100 point move higher in the Dow Jones Industrial Average will not get many of these stocks back above those support levels, which are now upside resistance levels.
While early morning futures are looking positive, I do not see any move higher today being much more than a bounce before the market moves back lower. I am going to be looking for a covered put position to enter for this morning’s trade.
Sterling Weekly for the Week of April 2nd, 2012 – A Look at 1st Quarter Index Performance Results
by sterlinginvestments • • 0 Comments
We saw the end of the 1st quarter of the year last week. As usual I like to take a look at the performance of the various sector indices I track and see what the market is telling us. I usually find these results to be somewhat interesting. I have published the results below for your review as well……………..In looking at the results of the 1st quarter 2012, the average index gained 12.21%. Overall a very good performance, but one that we should not expect to be repeated for each of the remaining 3 quarters as that would equate to a 48% plus annualized return. As far as the major market indices are concerned, the Dow Jones Industrial Average was up by 994.48 points or approximately 8.14%, the S&P 500 was higher by 150.87 points or approximately 12%, and the NASDAQ 100, obviously benefiting from the effect of Apple, was higher by 477.44 points or approximately 20.96%………………………..i have stated many times that I believe that Bull Markets are primarily the result of 2 things; the first being new technology, and the second being changes in government regulation. The results of the 1st quarter are pretty well explained by that thesis. The top performing indices were either the result of new technologies, such as the Amex Biotech Index and the various technology indices that were heavily influenced by Apple, Inc. ‘APPL.’ The second set of indices, those influenced by government regulation were the interest rate indices, the TYX, TNX, and FVX. The poor performing indices reflect the same results, rising interest rates is a negative for the Utility industry, and precious metals such as gold and silver. Additionally the beginning of the implementation of Obamacare and its massive amounts of regulation is a negative for the Healthcare related indices.
Sterling Market Commentary for Wednesday April 4th, 2012
by sterlinginvestments • • 0 Comments
After looking at the charts from Tuesday’s trading activity, it is somewhat surprising the turnaround. Despite the moderate move lower in yesterday’s market, the vast majority of the heavy volume stocks I looked at showed negative chart patterns. I attribute this to two primary factors. The 1st being the statements from the Fed that there will probably not be any additional quantitative easing, and the second being that the call for Apple to move to $1,001 per share, said that a big portion of the increase in value in Apple would come from market share gains at the expense of its competitors. Not good to be those guys, and as a result, Apple went higher, while many of the high tech indices went lower.
Sterling Market Commentary for Tuesday April 3rd, 2012
by sterlinginvestments • • 0 Comments
The overall market moved moderately higher on Monday and showed broad based strength in the process as the majority of the various sector indices I track moved higher, displaying solid chart patterns in the process. It has been a long time since I felt the overall market showed the strength that I saw in Monday’s charts. I am looking for the overall market to continue to move higher. In looking at a chart of the Dow Jones Industrial Average, I see that it completed a “cup pattern” in late February with a measured move to 14,955.78 While I do not expect the move to 14,955.78 to be in a straight line, and I expect at least 1 pullback along the way, I am now setting our new intermediate to long term target on the Dow Jones Industrial Average at 14,955.78
Sterling Market Commentary for Monday March 26th, 2012
by sterlinginvestments • • 0 Comments
A Look at Friday’s Market: The overall market finished Friday moderately higher in a relatively broad based move that saw the vast majority of the sector indices I track move higher on the day as well. There was strength in the Gold/Silver, Oil Services, Airlines, Chemicals, Broker/Dealers, Natural Gas, Oil & Gas, Banking, Biotech, Transports, Consumer, High Tech, and Retailers. There was weakness in the Telecom and Dow Jones Transportation Average. There was strength in the bond markets as interest rates moved lower. In the commodities markets, Oil was higher by $1.52 to $106.87 per barrel, and Gold was higher by $19.90 to $1,662.40 per ounce. In the grain markets, Wheat was higher by $0.080 to $6.542 per bushel, and Corn was higher by $0.020 to $6.464 per bushel, while Soybeans were higher by $0.162 to $13.656 per bushel.
Sterling Market Commentary for Tuesday March 13th, 2012
by sterlinginvestments • • 0 Comments
I have written many times in the past that I believe that during options expiration week you will see a reversal of the overall trend of the market as traders unwind their positions prior to the actual expiration; then following expiration at the start of the next current month, the trend will resume. What that means for today and this month is that I have felt there is a slight downward bias to the market, that could see a temporary reversal back to the upside this week before resuming its slight downward movement next week. ….