Tuesday, August 24, 2010

Market comments for Aug. 25th (UPDATE)

The Nikkei 225 has dropped for the first time since April 2009, to below 9,000 this evening and will set the tone for trading tomorrow. From the chart above you can clearly see that we broke below previous support level of 9,000. To get a sense on how much the Dow is over valued, back in April of 2009 the Dow was at 8,000 at that time.

There is no doubt in my mind that the world markets will catch up with our market and even the Fed won't be able to help. The Dow, S&P 500 and the Nasdaq will all drop this Fall, which by the way starts officially in about a week or so.

Economic data to be released at 8:30am EST are Durable Goods Orders for July and New Home Sales for July. Expectations are that Durable Goods orders will come in at +3.2% while last month they came in at -1.2%. New Home Sales are expected to be 300K. June's data came in at 330K New Home Sales.


DURABLE GOODS ORDERS came in at +3.0%, which is less than expected, but the Ex-Transportation data came in at -3.8%. That is terrible, as expectations were that they would come in at +0.5%. Last month's number came in at -0.9%, so that is another month down. New Home Sales comes in at 10:00am EST. Expectations are the number will be 300K. Stay tuned! Futures are down on the Dow to -57 so far.

UPDATE: 3:45pm EST
New Home Sales came in at 276K, a little less than expected. Also the previous month was revised downward from 330K down to 315K.

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