May 8th, 2012
in Gary's blogging
After Market Closing Comments:
Very interesting day watching the bulls and bears duke it out, and blood was spilled on both sides. At first glance it would appear the bulls have the upper hand, but it looks like the bears had the final word. The DOW closed down at 12932 off 76.46 -0.59%, the 500 was down to 1363 off 5.86 -0.43% and the $RUT was down to 793.06 off 0.75 -0.09.
The markets were able to recover about half of their losses by the close. The DOW and the 500 did challenge their 100 day MA's and recovered, but both below their 50 day MA's. SPY, SSO and QQQ did exactly as the DOW and 500 did. The Russell 2000 on the other hand challenged its 200 day MA, recovered but closed below its 100 day MA.
My outlook is for more losses in the morning hours tomorrow.
WTI oil closed up 2 points from its lows at 97, Brent closed up from its lows in the mid 110's at 113. Gold after jumping all over the place ended up at 1605.06 and the USD ended up at 79.94.
The 500 at the close.
The $RUT at the close.
The DOW at the close. Video: Dow Loses Grip On 13K, Slides On Greece Fears
The Index’s at the close.
“European markets finished sharply lower today with shares in France leading the region. The CAC 40 is down 2.78% while Germany's DAX is off 1.90% and London's FTSE 100 is lower by 1.78%.”
“After the bell on Tuesday, Disney posted second-quarter results that were well ahead of expectations. The entertainment giant earned 58 cents an adjusted share on revenue of $9.63 billion, while Wall Street was looking for 55 cents on $9.56 billion in sales. The stock is up about 2% in after-hours trading.“
“The euro fell against the dollar Tuesday on growing uncertainty about Greece's government and whether the country will continue to be part of the euro. The euro fell to $1.3030 in late trading Tuesday from $1.3050 late Monday. After a weekend election, Greek leaders failed to create a new government Tuesday.
One party leader said Greece's commitment to budget cutting is no longer valid because voters rejected those deals. The comments worried traders because Greece needs to stay on its austerity program to get it next batch of bailout money.
Going off the program could force Greece out of Europe's shared currency. France is also on trader's minds. Traders are waiting to see how the country's new president will affect Europe's current plans to solve its debt crisis.
Europe had pushed through budget cuts, but the election results in France this weekend proved that voters are against them.”
Noon Market Commentary And Analysis:
Market continued to ease down and paused for a brief run-up at 11:30. That has turned negative once again as we see the bias looking south, but with the volumes trailing off. Not sure just what Mr. market will do today with low volume numbers. The total volume today has been moderate to heavy and that is a good sign for future the prognostication pundits.
The DOW fell to 1281 and is at 12857, the 500 fell to 1347 and is currently at 1352 and the $RUT fell to 781 and recovered pinnies above its support at 786. WTI oil briefly dipped into the 95 region settling for now in the low 96 area. Brent also fell to the lower end of it daily chart to 110.52 and has sense risen to the mid 111's. Gold recovered from 1596 to 1601 trend looks negative. The USD fell from its high today of 80.08 to 79.93 and that trend looks positive as the US markets decline.
12:00 PM On the hour: Dow -1.08%. 10-yr +0.27%. Euro -0.29% vs. dollar. Crude -1.84% to $96.14. Gold -2.27% to $1601.85.
Market Opening Comments:
The market opened lower as expected and moderate red volume for the first 10 minutes. The 'Dippers' stepped in as usual and started to buy up the dip showing some green volume but not enough to overcome the market decline. The 10 o'clock financial reporting of USD IBD/TIPP Economic Optimism (MAY) did little to contain the markets slide. Only the Wholesale Inventories and the Crude Inventories reporting in tomorrow are considered of any importance. The others are rated of low importance but collectively could move the markets.
The USD climbed to 80.00 and has settled at 79.96. The Asian markets closed down and mixed while the Hang Seng closed down at -0.25%. The European Markets are down with the French CAC floundering down at -1.52%. WTI oil is trading in the 96 area and Brent has fallen to the mid 111 level. Gold has further eroded to 1601 the DOW dips to 12917 off 87.91 -0.69%, the 500 down to 1359 off 9.74 -0.71 and the Russell is down to 787 off 5.90 -0.74%. Market trend is down and the bias is down. Volume is decidedly red and moderate.
“Philip Aldrick, our economics editor, has posted a blog on Greece. The country is at the epicentre of a new euro crisis, he writes - and its chaos will spread:
The people of Greece know what they don’t want – they don’t want any more austerity. If another election is called to sort out the mess of last weekend’s result (the talk is of holding one on June 17) and the result is again a roughly 70pc vote against austerity, it will probably mandate the government to ditch the bail-out.
That would mean a euro exit, a return to the drachma, a massive devaluation, and a default on the remaining private sector debt. If that is what the people of Greece do want, it carries enormous risks. It would create unbearable tensions across Europe. The European Central Bank’s holdings of Greek sovereign debt would suffer losses, which would largely be transferred back to Germany.”
Premarket Comments And Analysis:
The SP500 futures fell from a high this morning of 1369 to a low of 1356 and have been at the 1360 level before the opening. The 500 closed at 1369.58 yesterday. SSO is showing some loss at 54.75 closing yesterday at 55.24. SPY is trading at 136.49 in light premarket activity down -0.67 from yesterday's close.
Most likely we will see a flat opening with a negative bias. Again depending on volume will most likely determine direction particularly after the European markets close at 11:30am. Low volume will certainly be in the favor of the bulls. WTI oil fell to 96 and is currently in the low 97's. Brent fell to the high 111's and is currently trading in the low 112's. Gold has once again fallen to new weekly lows of 1608 and is currently trading at 1611.
9:00 AM On the hour: S&P -0.4%. 10-yr +0.11%. Euro -0.37% vs. dollar. Crude -1.03% to $96.94. Gold -1.44% to $1615.55.
Leavitt had some good commentary this morning.
“Yesterday wasn’t a horrible day. The Asian/Pacific markets suffered stiff losses. Greece fell 7%. The incumbent in France lost. Europe overall dropped. The US markets had an excuse to cave but they didn’t.
The lows were established early, and the indexes closed mostly flat on the day. Closing flat on a day when lots of negative news is out is a good performance. It’s not good enough to turn me bullish, but it’s good enough to take note.”
He goes on to say “it’s also possible a hint of good news”. With the real threat of the Euro in the process of breaking up, France with a Socialistic President, Greece rejecting the “Barbaric” bailouts and Spain about to become insolvent, I am having a problem seeing where the good news is going to be coming from. Just a tad too much on the optimistic side for me.
“But as bad as sentiment has gotten recently, let’s back up and remind ourselves what the intermediate term charts look like. In all cases below, I’d consider the indexes to be in 2-month consolidation patterns. It’s entirely possible they break down; it’s also possible a hint of good news moves them back up. Lots of bad news has hit lately, and the market has not broken.”
“In shocking news, the Federal effort to limit bank bonuses and speculative trading has unleashed a wave of banks' most profitable traders exiting for the less-regulated world of hedge funds. "A lot of these guys were sitting atop a mountain of trading volume and revenue, much of which has eroded beneath them," says an executive recruiter.”
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Written by Gary