VR Trader Closing Comments: BEAR MARKET
Closing Comments
The market struggled once again to follow through on the huge up day posted on Wednesday. Volume decreased from Thursday and breadth was slightly negative.
In economic news, May durable goods orders fell 0.3% vs. consensus of +0.4%. Orders excluding transportation rose 0.7% and nondefense capital goods orders rose 1.0%.
We have been writing about the market being in a downtrend, but also trying to mount these rally attempts that have been nothing more than one day wonders which is the hallmark of a bear market. Today again showed the inability of this market to put together a meaningful rally as solid mid day gains turned into end of day losses. Early on there was a tug of war between two mindsets. One side was excited about M&A activity in the energy sector, with Anadarko Petroleum buying Kerr-McGee and Western Gas Resources, offsetting fears of slower economic growth as reflected in this morning's durable goods numbers. In the end the dour economic outlook prevailed as the Dow closed with a 30 point loss. We still have downside targets in the Dow Industrials at 10,300 and then 9,800. If the bulls can't get anything going soon, hitting those levels won't be a matter of if, but when.
August gold settled 2.60 higher at 588.0 in spite of solid gains in the US Dollar. We still remain bullish on gold as we have been saying for some time now. We will not be shaken out of our bullish stance by the recent volatility. We will hold long positions through the end of this corrective phase so we are on board when the uptrend resumes.
Have A Great Weekend.
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