The DJIA had been threatened with its first 3 day losing streak of the year but a rally in the closing minutes pushed that index into the green (the only index in fact to do so) and we continue the streak at over 100 days, the longest in history. As for other indexes they opened down sharply and despite positive economic news in the form of a durable goods report, stayed down in the morning but dip buyers showed up at almost the exact same spot as they did yesterday. The S&P 500 fell 0.06% and the NASDAQ 0.01%. This was the second worst week for the year, which is now saying much as most indexes only finished down in the 1 to 1.5% range.
Stocks fell rather sharply during the day Friday due to a worse than expected retail sales report and poor consumer confidence report but the dip buyers have been relentless and pushed stocks up well off their lows in the afternoon as there is currently no fear in the market and all dips are buying opportunities. The S&P 500 fell 0.28% and the NASDAQ 0.16%. It was a disastrous day in the precious metals markets, as we've been warning readers to "stay away" all year. More on that in a bit. As for the economic reports the main one was retail sales which came in at -0.4% which 0.2% of that coming from a drop in gasoline station sales.
Today's action in a nutshell courtesy of Fox News, "The markets closed little changed Wednesday as market participants remained cautious ahead of the ECB's meeting and the monthly jobs report."
Looking at the market indices, I am shaking things up tonight with long term, multi-year looks. Interesting rising wedge in the making for the S&P 500. The pattern, taught as the Rising Wedges Lesson on InvestingTeacher.com, is pretty clean and suggests we should ultimately break lower.
Thanks to the Fed's dovish comments today the market closed flat and had little price action. Mark from MarketMontage put it best today, "Clearly QE3 is getting 'baked in' as are ECB actions. If the central banks do not follow through it risks making the market 'angry' at this point." To say I am eager to see what happens in September and October when this realization comes to terms is an understatement.
Fed aside, a reader emailed in asking for updated analysis on Oil tonight, so that is where I am kicking off.
A bearish engulfment today could signal the market is ready for a pull back. Volume continues to be ridiculously low as investors travel and soak up the remaining bits of summer. Expectations of more QE will run us higher short term, but what happens when everyone gets back into the game in September and realizes it isn't coming?