SHORT TERM: market continues to pullback on weakened economic news
Overnight the Asian markets were mixed, but Europe looks to close higher. This morning the durable goods orders and new home starts came in much lower than expected creating fears of a weaker than expected economy. Stocks initially rallied on the news with a gap up opening. But that enthusiasm quickly evaporated and stocks resumed the correctional pullback of last weeks rally. This week long correction has now retraced about 38.2% of the recent rally, a typical fibonacci retracement. Also, the continuing saga of Iran (nuclear) - Iraq (stability) has allowed the sellers to pressure the market while the buyers hesitate. The commercials, in the lastest report, continue to increase their holdings for the third week in a row, as the speculators covered some short positions: positive for the market. Quiet week thus far.
MEDIUM TERM: SPX/DOW uptrending, NAZ/NDX correcting the recent rally
LONG TERM: bullish.
Hi!
Although a retest of the lows is always possible, it would appear that it is highly unlikely since the 4 year cycle low has already bottomed. The economy has weakened, the FED has paused and the Middle East crisis has simmered down. Looks like a good oportunity for some optimisim to start building. Thank you for the question.
Tony
Hi Tony:
I was going thru a couple of newsletters i read by some smart analyst..one of the analyst who has a good track record, he thinks that we could rally hard and make new highs for S&P and the DOW before labor day, but then we will retest the lows in sept and mid october that was made may and june..and that will setup the best opportunity for buying and continue into making new highs afterwards..do you think it could happen that we could down to test the lows again? thanks