Planet Wealth

The market opened lower this morning in the immortal words of Forrest Gump, "For no particular reason."  Actually, the market is a bit overbought in the short term following last week's low volume rise, but the main culprit is the fact that bond spreads have widened in Europe renewing fears of further problems in the EU.

The news of the morning is certainly the Jobless Claims as the Labor Department reported that claims for unemployment benefits fell to 473,000, which was slightly better than the 490,000 that was expected.  The S&P futures jumped about five points on the news and the market opened slightly to the upside.  The US Dollar is having a very bad day against all major currencies and could lend support to the positive stance in the market. 

The second time is the charm so far in today's trade.  The Dow was able to recover the 10,000 level on its second test attempt.  Now the dance comes from the other direction.  At the time of this posting, the market is now testing the 10,000 level from above.  As mentioned this morning, the close will be very interesting as to which side of 10,000 we finish.

The futures were flat pre-market open until the Durable Goods orders (goods that are expected to last for several years) number was released.  Although the number showed an increase of 0.3 percent for July, after stripping out the more volatile transportation sector (dominated by aircraft orders), orders actually fell 3.8 percent, the biggest drop since January.  Futures fell dramatically and it looked as though the Dow would open below 10,000.  The market opened and the Dow held above that psychological level of 10,000 until the New Home sales data was released.  N

Although opening slightly higher this morning, the market has moved to the downside after the release of some troubling economic data.  The jobless claims report showed a surprising (to some) increase of 12,000 claims or a seasonally adjusted 472,000 after three consecutive weeks of drops.  The LEI (Leading Economic Indicators) showed an increase of 0.4 against an expectation of 0.5.  However, the most shocking news of the morning was the Philly Fed Index coming in at a reading of 8 for June after a 21.4 reading in May.  That is an amazing drop in manufacturing activity

At the time of this posting, after finally breaking to the upside, the market is moving back down for yet another test of the 1108 level (as you clearly know by now, the 200 day moving average).

The testing process of a break of support/resistance works both ways.  The S&P was able to break above and more importantly close above, the important 200 day moving average at 1108 on Tuesday.  This morning the market has pulled back slightly and is testing the break from the upside.  Technical traders will all be watching closely to see if the market can hold that break from Tuesday's trade.

Here we go again!  As with yesterday, the market broke above 1100 and is testing the 200 day mva at 1108?  Can it break it this time?  If so and more importantly, can it close above 1108?  The afternoon battle will tell the tale.

The market opened higher and is once again testing the psychological level of 1100.  As discussed yesterday, the market was able to move above 1100 but was turned back at the 200 day moving average at 1108.  The same scenario is setting up again today, ie: a test of 1100 and an attempt to break back above the 200 day moving average.

The market broke the 1100 level, tested the break and then took on the 200 day moving average at 1108.  It would be expected that the shorts would try and make a stand there and they did just that.  The market was turned away just under 1108 and is now retesting 1100.  The close today should prove to be quite interesting as is watching the battle between the bulls and bears between 1100 and 1108.