Market Update and Daily Timing

Markets sold off hard yesterday with red virtually across the board.  The market indexes remain in a recovery phase and depending on price action over the next few days, we will see if this holds.  The TSX, DOW, and  SP500 are all showing rising wedge patterns for the last 6 weeks, which are considered bearish chart patterns.  This combined with the strong resistance each index was approaching, suggested that, technically, a sell-off was imminent.  Deflationary fears have surfaced again particularly in the Euro zone, as the debated between inflation and deflation continue.  Gold and silver rose yesterday and continue up today as the markets continue to decline.    Oil dropped hard yesterday, and remains in the middle of its range at about $48.  Oil has broken a key trend line, which suggests further weakness to come.  The energy sector has also fallen back into the bearish phase which means caution is warranted for energy stocks.  The biggest driver over the next few weeks will be earnings and guidance reported by companies.  If earnings and earnings expectations are lower than anticipated, we may continue to see more of a sell-off into the summer months.  The other factor affecting the market sentiment is the rumours surrounding the stress test results for the US banks. 

The Bank of Canada is making an interest rate decision this morning, but the anticipation is more on what else they will do such as quantitative easing.

  As of this writing, futures are negative and the DAX is negative, indicating a down open.   Also, according to the www.indexarb.com site, futures are in the probability zone for triggering sell programs.   The market condition scans are showing no directional bias.   The market bias indicators are also showing a neutral bias after yesterday’s sell-off, indicating once again a choppy indecisive market that remains in a bottoming condition.

Index	Change	%Change	Level	Phase
TSX	-311.50	-3.30%	9126.15	Recovery
DJIA	-289.60	-3.56%	7841.73	Recovery
Nasdaq	-64.86	-3.88%	1608.21	Recovery
SP 500	-37.21	-4.28%	832.39	Recovery
Russell 2000	-26.88	-5.61%	452.29	Recovery
NYSE	-260.48	-4.75%	5220.12	Recovery

Source: Telechart

Short Term market outlook:

Bias: Scans showing a neutral bias

Energy: moderate

 Primary Trend: Remains down to sideways

Sector	Phase
Consumer Staples	Recovery
Healthcare	Bearish
Technology	Recovery
Utilities	Bearish
Energy	Bearish
Financials	Recovery
Industrials	Recovery
Materials	Recovery
Consumer Discretionary	Recovery

Source: Telechart