Market comments for Aug. 16th (UPDATES)

The Dow has been going back and forth between Dow 11,000 and 11,500 as I said it might in recent posts. It is not clear yet whether we are going to go and stay above 11,500 in order for it to become support for the Dow or whether we will test it and fall back down below and head back to test 11,000. The charts below, especially the 3 month chart shows the volume has been dropping off while we have risen from below 11,000.



Housing Starts and Building Permits data will be released at 5:30am PST and I will update the information here and make a comment or two on this and Industrial Production data, also to be released.

Watch for news coming out of Europe as a high profile meeting between Germany and France will be taking place discussing the European debt crisis and should provide a news aspect to the market.

UPDATE: 5:30am PST Aug. 16th

Futures are down significantly this morning. News from the Eurozone responsible for the decline. The Eurozone released its Q2 GDP number and it came in at almost no growth at 0.2%. This has caused the German DAX to drop over 2.3% and caused the Dow Futures to drop to -150 points. Later today Merkel and Sarkozy to announce the result of their meeting about Sovereign debt issues across Europe amd any actions they plan to take. They are going to propose a Financial transaction tax across the Eurozone.

Housing Starts data was released here and the data showed 607K starts for July. Data for June was at 629K starts and expectations for July were at 600K. Building Permits came in at down -3.2% at 597K units.

July Import Prices were up +0.3%. while Export Prices were down -0.4%.

It looks like we will not penetrate above the 11,500 resistance level today, but instead may go and retest 11,000 in the next few days. The Volatility Index should rise sharply today.