Richard Suttmeier’s
Bear Tracks
A monthly close below the 120-month simple moving average at 10,601 signals
a multi-year Bear Market. The July 15th low at 10,828 was just 81 points (0.75%) above my annual
support at 10,747.
Chart Courtesy of Thomson / Reuters
The Weekly Chart for the Dow Industrial Average – Ended last week above its 200-week simple moving average at 11,714, which
sets the July 15 low of 10,828 as the low end of the range at least through Labor Day. Monthly
support is 11,075 with semiannual and annual resistances are 12,623, 12,670 and 12,845.
Chart Courtesy of Thomson / Reuters
The Major Equity Averages
|
Market
|
8-Aug
|
YTD
|
2007
|
52 Wk
|
Cycle
|
Date
of
|
|
Price
|
Gains
|
Close
|
Lows
|
Highs
|
Highs
|
|
The Dow
|
11,734.00
|
-11.5%
|
13,265.00
|
10,827.71
|
14,198.10
|
Oct-07
|
|
S&P 500
|
1,296.30
|
-11.7%
|
1,468.30
|
1,201.00
|
1,576.06
|
Oct-07
|
|
Nasdaq
|
2,414.00
|
-9.0%
|
2,652.00
|
2,155.42
|
2,861.51
|
Oct-07
|
|
Utilities
|
471.18
|
-11.5%
|
532.44
|
460.68
|
555.71
|
Jan-08
|
|
Transports
|
5,217.00
|
14.1%
|
4,571.00
|
4,032.88
|
5,536.57
|
May-08
|
|
Russell 2000
|
734.30
|
-4.4%
|
768.00
|
637.50
|
862.00
|
Jul-07
|
|
Semis (SOX)
|
367.19
|
-10.0%
|
408.04
|
330.24
|
549.39
|
Jul-07
|
S&P 500: Monthly support is 1208.0 with my annual pivot at 1276.6, and semiannual resistances
at 1495.3 and 1497.3.
NASDAQ:
Weekly and monthly supports are 2199 and 2111 with quarterly and annual resistances at 2504 and 2536.
Transports:
Weekly and annual supports are 4830 and 4267 with a monthly pivot at 5195, and semiannual resistances
at 5614 and 5804.
Russell 2000: Weekly and monthly supports are 678.11 and 662.58 with my annual pivots at 730.04
and 754.76 and quarterly resistance at 783.42.
The SOX:
Weekly and monthly supports are 323.65 and 320.81 with semiannual resistances at 378.50 and 381.45.
This week’s economic data should continue the weakening
trend
·
Monday – No economic data today.
·
Tuesday – The Trade Deficit should be 62 billion in June.
·
Wednesday – Import prices should increase 1.0% in July. Retail Sales
should be 0.1% higher.
·
Thursday – CPI should be up 0.4% in July and Initial Jobless Claims
should rise by 450,000.
·
Friday – Industrial Production should be down 0.1% in July with Capacity
Utilization at 79.4%. Consumer Sentiment should be a weak 58.0.
My fearless prediction last week was that the Federal
Reserve would leave rates unchanged at its August 5 meeting. Economic weakness will again trump commodity
inflation. The key statement was, “Tight credit conditions, the ongoing housing
contraction, and elevated energy prices are likely to weigh on economic growth over the next few quarters.”
My fearless prediction for the week – Last week
miserable earnings from Fannie Mae and Freddie Mac were all but ignored by the US Capital Markets with
the strong dollar, strong stock market, and weak commodities. This week will mark the beginning of the
end to that “weak oil, strong stocks” trade. Fundamentally reduced demand for energy is a
sign of global economic weakness. A stronger dollar is by default as Great Britain and Europe face worsening
economic conditions relative to the United States. Emerging markets including China continue bear markets.
In my opinion commodities were weak and stocks were strong last week as pension funds liquidated commodity
investments and bought stocks indiscriminately. Industry sources tell m that at the end of June pension
funds held $300 billion in commodity investments. With Nymex Crude Oil down 20%, pension funds likely
reduced this exposure by at least $30 billion.
The Yield on the 30-Year Bond – Annual support
is 4.975 with quarterly and monthly pivots at 4.628 and 4.593, and semiannual, weekly quarterly and semiannual
resistances at 4.489, 4.393, 4.191 and 4.107.
Comex Gold – Semiannual and annual supports are
$796.5 and $729.5 with quarterly and semiannual pivots at $881.9, $921.7 and $938.2, and weekly and monthly
resistances at $961.1 and $1034.4.
Nymex Crude Oil – Semiannual and quarterly supports
are $109.62 and $108.23 with weekly and semiannual resistances at $125.51 and $127.99. Annual supports
lag at $78.40 and $76.30. I still say $75 before $200.
The Dollar versus Japanese Yen – Weekly support
is 107.19 with quarterly and annual resistances at 111.45 and 113.88.
The Euro – Annual support is 1.7913 with monthly
and annual pivots at 1.9152 and 1.9217 and weekly resistance at 1.9951.
Upcoming Media Events for Richard
Suttmeier
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Worldwide Exchange, 5:50 AM
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News Network, 9:20 AM
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Business, Countdown to the Closing Bell, 3:00 PM to 4:00 PM
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The RightSide Report is Richard Suttmeier's weekly market
analysis where each week he makes a fearless and specific prediction about
whether a particular market will be going up or down the next week.
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