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The stock market has started the Wednesday session out on a weaker footing and in some measures that has resulted in a fresh new low for the move. The US Treasury market continues to price in moderate concern of deflationary slowing and at times the trade is openly tossing around the double dip recession moniker. While the stock market has the capacity to benefit from talk of an extension of quantitative easing, that revelation also seems to have coincided with this weeks high and reversal from the highs. The market did see evidence of a successful “static kill” on the Gulf spill overnight and the market also saw a slight rise in UK regional house price measures, but that news hardly looks to erase the fear of slowing that continues to dominate the US landscape. While the magnitude of US monthly job losses don’t appear to be significant, the equity market has recently been in the vicinity of three month highs and therefore the market appears to be “expensive”.
S&P 500: The bear camp will suggest the S&P is presenting a pattern of lower highs and lower lows, while the bull camp will claim that the market recently became short term overbought and that recent losses were merely technical balancing. However, there doesn’t appear to be much in the way of panic in the current market, as the fears of slowing aren’t fostering high levels of anxiety. Near term downside targeting is seen at 1110.90 and perhaps not until 1109.50.
DOW: While the September Mini Dow didn’t seem to be under noted and aggressive early pressure, prices were hovering around the prior session’s lows in the early going. Given the big range up action seen on the first trading day of August and the temporary high forged last week, the September Mini Dow seems to be facing a decision on holding recent levels, or moving back down to levels that were seen into the end of July. Fortunately for the bull camp, the global equity markets saw record profits at a Pacific based airline, favorable UK House price readings and a rise in Euro zone private sector growth readings. Therefore there are countervailing issues capable of distracting the trade away from the evidence of slowing in the US economy. However, recent action in the market suggests that some longs are banking profits and others are reducing holdings because of the slack economic outlook. Near term downside targeting is seen at 10,527 but a further erosion in prices could be expected into the US Non Farm payroll release later this week.
NASDAQ: The September Nasdaq is showing some initial weakness today but prices have yet to return to the prior session’s lows. Since the Nasdaq appeared to lag behind the rest of the market on the July and August rally, that action might serve to cushion the Nasdaq against broad based profit taking selling. The Indian stock market managed to reach the highest level since February of 2008 overnight but yet that type of optimism looks to be lost on the US market today because of its current track of slowing fears. Near term downside targeting in the September Nasdaq is seen at 1878.00 and perhaps not until 1869.25.
TODAY’S MARKET IDEAS: A lack of optimism toward the economy seems to be providing the bear camp with control over prices. Expect a consistent downside track in prices without much anxiety.
Stock Market Commentary – 2010.08.04
by Dave Hightower on August 4, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
The stock market has started the Wednesday session out on a weaker footing and in some measures that has resulted in a fresh new low for the move. The US Treasury market continues to price in moderate concern of deflationary slowing and at times the trade is openly tossing around the double dip recession moniker. While the stock market has the capacity to benefit from talk of an extension of quantitative easing, that revelation also seems to have coincided with this weeks high and reversal from the highs. The market did see evidence of a successful “static kill” on the Gulf spill overnight and the market also saw a slight rise in UK regional house price measures, but that news hardly looks to erase the fear of slowing that continues to dominate the US landscape. While the magnitude of US monthly job losses don’t appear to be significant, the equity market has recently been in the vicinity of three month highs and therefore the market appears to be “expensive”.
S&P 500: The bear camp will suggest the S&P is presenting a pattern of lower highs and lower lows, while the bull camp will claim that the market recently became short term overbought and that recent losses were merely technical balancing. However, there doesn’t appear to be much in the way of panic in the current market, as the fears of slowing aren’t fostering high levels of anxiety. Near term downside targeting is seen at 1110.90 and perhaps not until 1109.50.
DOW: While the September Mini Dow didn’t seem to be under noted and aggressive early pressure, prices were hovering around the prior session’s lows in the early going. Given the big range up action seen on the first trading day of August and the temporary high forged last week, the September Mini Dow seems to be facing a decision on holding recent levels, or moving back down to levels that were seen into the end of July. Fortunately for the bull camp, the global equity markets saw record profits at a Pacific based airline, favorable UK House price readings and a rise in Euro zone private sector growth readings. Therefore there are countervailing issues capable of distracting the trade away from the evidence of slowing in the US economy. However, recent action in the market suggests that some longs are banking profits and others are reducing holdings because of the slack economic outlook. Near term downside targeting is seen at 10,527 but a further erosion in prices could be expected into the US Non Farm payroll release later this week.
NASDAQ: The September Nasdaq is showing some initial weakness today but prices have yet to return to the prior session’s lows. Since the Nasdaq appeared to lag behind the rest of the market on the July and August rally, that action might serve to cushion the Nasdaq against broad based profit taking selling. The Indian stock market managed to reach the highest level since February of 2008 overnight but yet that type of optimism looks to be lost on the US market today because of its current track of slowing fears. Near term downside targeting in the September Nasdaq is seen at 1878.00 and perhaps not until 1869.25.
TODAY’S MARKET IDEAS: A lack of optimism toward the economy seems to be providing the bear camp with control over prices. Expect a consistent downside track in prices without much anxiety.
Tags: DOW, Financials, NASDAQ, S&P500, Stocks
About Dave Hightower