July 25th, 2012
in Gary's blogging
Closing Market Commentary For 07-25-2012
The Markets were mixed as the session drew to a close and lacking direction for most of the day. It finally closed mostly up after an excruciating slow afternoon. The lack of news and low volume allowed DaBoyz to melt the markets up until the closing minutes where some profit taking move the averages down. Some last minute after market 'dippers' moved some of the indices higher, but as we all know it doesn't, lately anyway, mean squat when the markets open in the morning.
Market recap: “Stocks ended mixed, as Apple weighed on the Nasdaq following a rare earnings miss while solid earnings from Boeing and Caterpillar helped prop up the Dow.
While the industrial side of the economy looks good, new home sales fell more than expected, dampening market sentiment.
Spain's 10-year yield hit a new record high of 7.75%. NYSE advancers led decliners seven to five.”
The DOW closed at 12676 up 58.73 or 0.47%.
The 500 is at 1337 down 0.42 or -0.03%.
The $RUT is at 769.31 up 1.56 or 0.20%.
SPY is at 134.07 up 0.14 or 0.10%.
The trend remains neutral and the current bias is neutral.
WTI oil is at 89.00 trading between 89.34 and 86.88 and the bias is positive.
Brent crude is at 104.53 trading between 102.06 and 104.72 and the bias is positive.
Gold is up today at 1604 trading between 1611 and 1579 with a positive bias.
Dr. Copper is at 3.39 up from 3.33 earlier.
As reported earlier the USD tumbled from 84.17 to 83.65 and ended the day at 83.69. The gap at 83.61 was covered earlier at 2:50pm by dipping down to 83.61, BUT it did not go further and needs to confirm the closing by testing 83.61 or go below it. Translation the US markets may rise in the near term as the USD falls.
The SP500 at the close.
The $RUT at the close.
The DOW at the close. For those that follow the DOW Theory Sell Signal the signal occurs when transports or industrials set a new closing low for the time being analyzed, followed by a confirming closing low by the other. If the other index does not follow, it is a Dow Theory non-confirmation.
The daily chart for the Dow Jones Industrial Average (below) is also negative, with declining momentum (12x3x3 daily slow stochastic). The Dow industrials is below its 50-day simple moving average at 12,609, but the 200-day simple-moving average at 12,531 held at Tuesday's low. The transports ($DJT) are thus leading the industrials lower.
The DOW Transportation at the close. The previous closing high for the transports was 5514.87 on April 29, 2011. The year-to-date high for the Dow industrials in 2011 was also set on April 29, 2011 at 12,810.54, so a Dow Theory buy signal in July required a close above 12,810.54 by the Dow industrials for confirmation.
The daily chart for the Dow Jones Transportation Average (below) is negative with declining momentum (12x3x3 daily slow stochastic, and closes below the 50-day and 200-day simple moving averages at 5074 and 5077, respectively, which are now a bearish crossover.
What I have been saying – anyone listening?
Despite good earnings reports this morning and speculation of more quantitative easing, Doreen Mogavero of Mogavero Lee, says this market has more downside coming. (2'18” video)
Don't Buy The Dip Yet: Equities Have Plenty Of Room To Fall by Mike Williams
“. . . . bull markets are much more difficult to break than bear markets. In rapidly declining markets, fear begets fear and investors capitulate rather quickly. In strong, long-term bull markets like the one we've seen since March 2009, the breakdown of the trend takes more time.
This doesn't mean you should be long; it simply means that the so-called "dip-buyers" need to really feel the pain before stocks realign with reality.
Regardless, on a shorter-term basis, the path of least resistance appears to be from the short-side of broader U.S. indices. With SPY fair value almost 5% lower than where we are now (about 1,342) and plenty of macro catalysts to put headline pressure on the markets, I recommend traders stay short. I still own my longer-dated puts on the SPY.”
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Written by Gary