AI
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Friday, January 30, 2009 12:53:26 PM
Weekly Technical Commentary by Art Huprich - Friday Morning 01/30
Stock futures pointed to a lower open yesterday, following the latest batch of economic data. December durable goods orders fell 2.6%, which is worse than the 2.0% decline that was expected. Orders in the prior month were revised lower as well. Consequently, “stocks” opened lower and never looked back. When I said yesterday that I was looking for a near-term “pause / pullback,” I wasn’t expecting a one-day 2.70% (226 point) or 3.2% (50.50 point) decline by the DJIA and the NASDAQ, respectively. Bonds were hammered again as the 10-year yield [you can follow this using the symbol (TNX/28.15)] continues to march higher. While some type of pullback wouldn’t surprise me, I can see the 10-year yield (2.81%) moving towards 3.07% and possibly 3.10% to 3.20%. Bank, REIT, and brokerage stocks lead the way lower. The Bank Index (BKX/29.88) and REIT Index (RMZ/434.24) each fell 8% and the Broker-Dealer Index (XBD/75.23) fell almost 7%. The Gold and Silver Index (XAU/125.49) was up just over 4%. The XAU continues to exhibit excellent short and intermediate-term actual and relative price strength!
On the NYSE volume contracted to 1.42 billion shares. Unfortunately, declining volume swamped advancing volume, this is not good. There were 2083 net declining issues, in-line. The Index Put – Call Ratio, which had fallen very low Wednesday and was one reason why I made some cautionary near-term comments yesterday, closed at 145%, a step in the right direction.
Gold ($905.10), the actual commodity itself, is moving above another downtrend line, defined by connecting its March and July 2008 peaks. Within the context of an intermediate-term up trend (see 1/23/09 report) next resistance for Gold is between $936 and $940 followed by $980(ish). Support = $874 (minor), $843 and between approximately $828 and $833.
Conclusion
Following yesterday’s 226 point “downer,” as I was leaving yesterday, the following question was posed to me in the elevator. “Come on Art, what do you think?” “About what” I replied. “The stock market” was his response. To which I replied, “Until proven otherwise, I still believe we are in a very lengthy lateral moving basing period.” I then added, “Please recall that following the 2000 to 2002 decline, the entire bottom building period took approximately 11 months to form and complete.” “This decline was worse and occurred in a much shorter period of time. Thus, it is going to take longer and be even more frustrating, in my opinion.”
For full technical Commentary and Charts:
http://www.rjf.com/technical_commentary.asp
George.
Click on "In reply to", to see any past commentary.
Stock futures pointed to a lower open yesterday, following the latest batch of economic data. December durable goods orders fell 2.6%, which is worse than the 2.0% decline that was expected. Orders in the prior month were revised lower as well. Consequently, “stocks” opened lower and never looked back. When I said yesterday that I was looking for a near-term “pause / pullback,” I wasn’t expecting a one-day 2.70% (226 point) or 3.2% (50.50 point) decline by the DJIA and the NASDAQ, respectively. Bonds were hammered again as the 10-year yield [you can follow this using the symbol (TNX/28.15)] continues to march higher. While some type of pullback wouldn’t surprise me, I can see the 10-year yield (2.81%) moving towards 3.07% and possibly 3.10% to 3.20%. Bank, REIT, and brokerage stocks lead the way lower. The Bank Index (BKX/29.88) and REIT Index (RMZ/434.24) each fell 8% and the Broker-Dealer Index (XBD/75.23) fell almost 7%. The Gold and Silver Index (XAU/125.49) was up just over 4%. The XAU continues to exhibit excellent short and intermediate-term actual and relative price strength!
On the NYSE volume contracted to 1.42 billion shares. Unfortunately, declining volume swamped advancing volume, this is not good. There were 2083 net declining issues, in-line. The Index Put – Call Ratio, which had fallen very low Wednesday and was one reason why I made some cautionary near-term comments yesterday, closed at 145%, a step in the right direction.
Gold ($905.10), the actual commodity itself, is moving above another downtrend line, defined by connecting its March and July 2008 peaks. Within the context of an intermediate-term up trend (see 1/23/09 report) next resistance for Gold is between $936 and $940 followed by $980(ish). Support = $874 (minor), $843 and between approximately $828 and $833.
Conclusion
Following yesterday’s 226 point “downer,” as I was leaving yesterday, the following question was posed to me in the elevator. “Come on Art, what do you think?” “About what” I replied. “The stock market” was his response. To which I replied, “Until proven otherwise, I still believe we are in a very lengthy lateral moving basing period.” I then added, “Please recall that following the 2000 to 2002 decline, the entire bottom building period took approximately 11 months to form and complete.” “This decline was worse and occurred in a much shorter period of time. Thus, it is going to take longer and be even more frustrating, in my opinion.”
For full technical Commentary and Charts:
http://www.rjf.com/technical_commentary.asp
George.
Click on "In reply to", to see any past commentary.
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