Daily Investment Interpretations

August 17, 2009

2009-8-17:  Stock market futures are predicting a horrid beginning for the week. Chinese stocks have fallen 5.8% on the day (Monday), and have penetrated their 25-day moving average. (Note, though, they also penetrated their 25-day moving average more profoundly on August 5th.) The S&P 500 is currently down 19.5, the Nasdaq is off 28.25, and Dow has fallen 176 points. My technical advisory service warned last night that the markets are set for another corrective phase that may occur if the S&P falls below 990. So far, it's advising buying on the dips.

The indices retreated today. The NASDAQ Composite pulled back 23.83 points (-1.19%) to close at 1,985.53, the Dow doffed 76.79 points (-0.82%) to close at 9,321.40 and the S&P 500 parted with 8.64 points (-0.85%) to end at 1,004.09. Oil dropped $3.01 to close at $67.58 a barrel, while gold declined $8 to $949. The VIX dropped 0.44 to 24.27. 
    There was a heavy spate of buying in the closing minutes of the day... institutional investors buying on the dip?
    One of the downers for the day was the fact that consumer optimism dropped instead of rising, implying that consumers aren't about to start spending like it's 2007.
    The Chinese marketplace, although it has consolidated for the past week-and-a-half, is still above its 25-day moving average, and well above its 50-day moving average. The Cabot China and Emerging Markets Report is still on full-steam-ahead.
    Now is a time to sit and watch to see whether the markets are going break down or up. My investment advisory service notes that the markets are trading again in a range.
    The Cabot newsletter is very bullish, looking for a major rise in the markets over the next year or two in spite of the doom and gloom proffered by the media.