Tuesday, April 19, 2011

Market comments for April 19th on the Dow and CAT

Looking at yesterday's drop in the markets and specifically the Dow, you can see that again Caterpillar, symbol CAT, which has led the Dow rise over the past year was one of 2 stocks leading the Dow lower yesterday. I have posted 2 charts below of Dow and Caterpillar which shows the extent of CAT's move down lately. More is to come as the market goes lower, but there will be bounces up on the way down. Notice the volume to the downside for CAT yesterday. It was very high, suggesting more downside is to come.

Housing starts and Building permits data was released today and both showed better than expected numbers. While many see this as a positive for the Real Estate market, I see it as a negative because the supply of houses on the market or about to be put on the market much too high a supply. This will keep housing prices low and may drive prices even lower if this becomes a trend and continues.

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