Daily Investment Interpretations

June 23, 2009

2009-6-23:  The markets moved sideways today, but yesterday was a 14:1 down day for the S&P 500, and the market outlook is grim.
NASDAQ Composite ended the day down 1.27 points (-0.07%) to 1,764.92 (basically unchanged), the Dow lost 16.1 points (-0.19%) to close at 8,322.91, and the S&P 500 added 2.06 points (-3.06%) to end the day at 893.04 Oil rose $1.74 to  $68.63 a barrel, while gold climbed $3 to 924. The VIX shrank 0.59 to  30.58.
This is the second day the Dow and the S&P 500 have closed under their 50-day and 200-day moving averages, while the Nasdaq Composite has penetrated its 25-day average but is still above its 50-day average. The short-term (25-day) averages have topped and turned slightly down for the Dow and the S&P 500, while the 50-day averages have flattened. All three of my market timing advisors have turned cautious. The next major resistance comes at S&P = 880. If the bears break through there, it will probably be time for wholesale selling.
    Michael Ashbaugh's Tuesday technical analysis (Down time), reaffirms that the market broke down yesterday, and the most likely path is a move lower from here. He mentions that the VIX still signals remarkable complacency: Fear gauge is on the rise, but not fear itself
    Cabot's China and Emerging Markets Report has just recommended that we  subscribers sell a portion of our holdings.