In today’s edition of the Sterling Market Commentary we take a look at Wednesday’s market, and take a closer look at the price of oil which we see moving higher and test $98.74 per barrel in the short term and provide our longer term forecast.
Sterling Investment Services look at Wednesday’s market as well as our thoughts on Thursday’s upcoming market. In addition, in this morning’s Sterling Market Commentary we take a look at the price of oil and its potential to reach $100 and what happens if it breaks that price level.
The overall market moved moderately higher in a relatively broad based move. There were a few notable exceptions as the commodities based indices moved lower. A lot of this move lower was sparked by a sharp sell off in Oil, which was lower by $3.75 to $88.14 per barrel. In searching the news reports related to the sharp drop in the price of Oil, I found that it was attributed to 2 primary factors. The 1st being a slowing of the global economy, and the 2nd being a slowing of the Chinese economy. Neither of these things is good for the U.S. Economy and the overall market. In looking at a chart on the price of Oil it appears to me that their is a reasonable chance that the price of Oil could continue to move lower and test its support level of $79.01 per barrel set on June 28th of this year. While the lower price of Oil would be good for consumer’s pocket books, my concerns are that with all the computerized trading, the lower price Oil would be a sign of a significantly weakening global economy.
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.
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.
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 […]
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.
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.
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
A Look at Monday’s Market: The overall market moved sharply higher in a broad based move that saw every index I track move higher on […]
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