July 24th, 2012
in Gary's blogging
Midday Market Commentary For 07-24-2012
By noon the markets continued to slide down more on relatively moderate to heavy red volume giving credence to the downward movement. The falloff became more exaggerated as SA reports, “It's another ugly day in Europe, particularly the periphery, as stocks close on the lows. Stoxx 50 -1.3%, Germany -0.5%, France -0.9%, Italy -3.1%, Spain -3.8%, U.K. -0.7%. Spain's 3-day loss sums to 10.4%, a crash for that already beaten-down market. In Athens, the main index falls 7.1%, the largest drop since October 2008.”
By 12:15 the markets were in a full fledged movement down falling below yesterdays lows. The question is whether the 50 day MA, where most indexes are now at, will hold as a support? Unlikely as the Russell 2000 closed below that level yesterday and the low caps have been preceding down movements of late.
The DOW at 12:15 is at 12574 down 146 or -1.16%.
The 500 is at 1335 down 15.36 or -1.11%.
The $RUT is at 770.72 down 8.16 or -1.05%.
SPY is at 133.70 down 1.37 or -1.03%.
The trend is down and the current bias is down.
WTI oil is at 88.64 trading between 88.96 and 87.45 and the bias is neutral. It recent highs is at 91.65
Brent crude is at 103.29 trading between 104 and 102 and the bias is negative although it fell from 106 yesterday..
Gold is down today at 1573 trading between 1572 and 1588 with a negative bias.
Dr. Copper is at 3.35 down from 3.39 earlier. Current bias is negative.
The USD climbed from 84.03 to 83.82 earlier and lately as high as 84.17 and is still climbing. Further declines sometime in the future days are expected to cover a gap made yesterday at 83.62. This usually means the US markets will rise as the USD falls. Look for this gap covering to start setups for shorts in the US equity markets.
The Italian bond market is taking the worst of it today, 2-year notes 42 bps higher to 5.06% (the yield briefly fell below 2% following LTRO II in February). 10-year paper is 24 bps higher to 6.58%, well above the levels which helped trigger panicky action last summer. With Spain maybe about to fall into the arms of the Troika, the battle moves to Italy.
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Written by Gary