Friday, August 12, 2011

Market comments for Aug. 12th, 2011 (UPDATE)

Yesterday we did rally on the lower Initial jobless Claims data, but let's be honest here, the data was not that great for such a strong rally. Yesterday's charts give conflicting signals to me for a short term read on direction. I have put together 4 charts for today. One on the Dow, one on the S&P 500, one on the Nasdaq and finally the last one on the Russell 2000. I have drawn some lines on each chart. Some show that the trend looks down from here, others show up from here and one shows stagnant and staying at this level. So we will need more days of data for clarity. Here are the various charts:

From these charts above you can see that the long steep downward move hit a bottom, rose back up a bit dropped again and then rose up again. This second move up did not convincingly go much higher than than the first bounce. In fact, depending on which index you look at, the Dow actually came in below the first bounce. I will need today and tomorrow's market action to get a better sense of near term direction. The Volume though has been extraordinary for a summer month.

Also, of interest from yesterday's Volume was the chart below of the Dow in 1/2 hour increments and the Cumulative volume up to that time. In the last 1/2 hour yesterday, the Dow traded 146 Million shares!

Retail Sales data released this morning for July was +0.5%. Expectations were for +1.0% and the data from June was only +0.1%.

Michigan Consumer sentiment data will be released in 1 1/2 hours and I will post it as an update. Futures initially responded slightly up from the release of the Retail Sales data.

UPDATE: 7:01am PST

Consumer Confidence came in at 54.9, which was the lowest reading since May 1980!! When the data was released it reversed, from being up 140 points on the Dow to being up only 50 points. This is a contributing factor to why the Fed most likely thought they needed to keep interest rates very low through to 2013. To put today's number into perspective, last month Consumer Confidence came in at 63.7 for July.

Labels: , , , , , , , , , ,


Post a Comment

<< Home

Technorati Profile