Tuesday, July 7, 2009

Morning Update/ Market Thread 7/7

Good Morning,

Equities are slightly lower this morning and so are bonds and the dollar. Commodities are up slightly. Here’s the overnight action in the DOW and S&P:

The only data out today comes in the form of store sales. The ICSC grew by .1% month over month and by .5% year over year in the last week. Redbook – a weekly measure of sales at chain stores, discounters, and department stores – fell by 4.2% year over year for the week and that follows a -4.3% read the week prior.

The late day rally yesterday (very unnatural looking) produced hammers on almost all the indices. They did reach key support levels yesterday morning, the SPX touched the 200dma and the lower Bollinger band before beginning its climb back into positive territory:

You can see that the DOW did likewise and it was on higher volume. To be valid, prices need to exceed the top of those hammers today, if they do not then they are not valid reversal signals:

Those hammers look on the chart like bottom indicators but I’m not sure I’m buying them as valid. They are shadowed against the body of the previous candle and most of the buying occurred in the last 15 minutes, a sign of gamesmanship. Keep in mind that the P&F on the DOW still has a target of 7,700:

Most of my other indicators are squarely in neutral territory. Keep in mind that any rally from this point will pressure bonds again and so I don’t think they can let equities run still.

That’s about all I have for right now. NYSE is claiming that the Goldman brew ha,ha was all their mistake… sure it was. Tell you what, George Carlin (RIP) had it all figured out…

George Carlin Video: The Truth About Wall Street And Washington (ht Glass):