July 25th, 2012
in Gary's blogging
Opening Market Commentary For 07-25-2012
Markets opened up as the 'dippers' marched in groves pushing the green volume up to 'moderate' in the first 10 minutes. Much weakness is abound as financial corporate project weaker Q3 earnings and current reporting is on lower earnings. Trading is light and mixed by 9:45 am with signs that another down day may be at hand.
By 10 am the market place was decidedly bearish with red volume greasing the skids. Nothing has changed in the last 24 hours as the Eurozone, the US and the emerging markets (BRICS) are all weak and deteriorating. The 10 am financial report on US New Home Sales made a big miss falling to 8.4% to 350,000 while economists were expecting 372K. The prior number was revised up 382K
That sent the SP500 down 8 points in the blink of an eye as moderate red volume mounted. I suspect we will have a sideways trading day unless the volume fall to anemic then DaBoyz will melt the market up. The RRR** is very thin and not conducive to trading.
The DOW at 10:15 is at 12665 up 49.46 or 0.42%.
The 500 is at 1337 down 0.94 or -0.07%.
The $RUT is at 769.65 up 1.93 or 0.25%.
SPY is at 133.91 down 0.01 or -0.01%.
The trend is neutral and the current bias is down.
WTI oil is at 88.47 trading between 89.18 and 87.78 and the bias is negative.
Brent crude is at 103.28 trading between 102 and 103 and the bias is negative.
Gold is up today at 1601.30 trading between 1604 and 1579 with a positive bias.
Dr. Copper is at 3.38 up from 3.33 earlier.
As reported earlier the USD tumbled from 84.17 to 83.65 and recovered to 83.86. The gap at 83.62 still hasn't been covered and usually FOREX gaps are covered sooner rather than later. Translation the US markets may rise in the near term as the USD falls.
Europe stocks erase gains after home-sales data
European markets are up today. The FTSE 100 in London is up 0.16% while the German DAX is up 0.51%. The CAC 40 in France is also up at 0.98%. The Asian markets closed down with the Hang Seng at -0.14. The Shanghai Composite down -0.49%. The Nikkei down -1.44%.
I too feel that the bullish optimism is way overblown in light of reality in the World economy.
"You have been warned," writes Nomura's Bob "the bear" Janjuah, expecting a 20-25% decline in the S&P over the next quarter. Agreeing with consensus about deteriorating economic growth seemingly everywhere, Janjuah believes the market is too optimistic about the timing, size, and efficacy of any government policy moves.
“Countries in central and south-eastern Europe are expected grow less than previously expected as the negative impact of the Eurozone crisis on emerging Europe spreads further east, a report from the European Bank for Reconstruction and Development (EBRD) said Wednesday.
The bank said most of the economies across the transition region have been hit by the deepening debt crisis as lower global demand feeds through to lower commodity prices and generally lower risk appetite.
The revised outlook shows that spillovers from the turbulence in Europe are now having a negative impact on Russia also.”
** RRR = Risk Reward Ratio
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Written by Gary