Markets Continue to Look Tired

The futures are mixed this morning and the DAX is marginally positive, indicating a mixed open.  Markets may open up today after two down days.  The market bias indicators are starting to show some bullish bias, but the market condition scans are showing continued downward pressure.  Overall market energy remains weak. 

The TSX has returned to its 50 day moving average as all key sectors: materials, financials, and energy were down yesterday.  Now we need to watch and see if the markets bounce from this level or continue to move down. 

The SP500 has moved down to its 30 day moving average and still has room to move down to the 50 day moving average which is at about the 1050 level.  Similarly, the Nasdaq Composite is at its 30 day moving average and could also continue down to touch its 50 day.  The DOW is showing the same path as the other American indexes, currently touching its 30 day moving average and has fallen back from the psychological 10000 level.  Finally the Russell 2000, representing the small cap stocks, is showing the most weakness, as it has returned to its 50 day moving average.  At the moment, we have only retracements.  We would need to see completed lower pivot highs to indicate a potential reversal.  

However, as all the indexes remain above both their 50 day and 200 day moving averages, we remain in an overall bullish stance.  The caution is to be patient and watch the charts for signs the retracement is complete or is turning into a reversal. 

In terms of sectors as tracked by the sector spiders, financials are back to the 50 day moving average, energy, consumer staples, consumer discretionary and technology remain above their 30 day moving averages, utilities and healthcare both closed below their 50 day moving averages, and industrials along with materials are touching their 50 day moving averages.  However, like the indexes, the sectors all remain above the 200 day moving average.

If the US Dollar continues to move countertrend, we will likely see the markets continue to correct, as they have been exhibiting an inverse correlation to each other for the past few months.  The US Dollar has retraced back to its 30 day moving average, but the overall trend remains down.

Index	Change	%Change	Level	Phase
TSX	-147.25	-1.29%	11234.88	Bullish
DJIA	-104.22	-1.05%	9867.96	Bullish
Nasdaq	-12.62	-0.59%	2141.85	Bullish
SP 500	-12.65	-1.17%	1066.95	Bullish
Russell 2000	-7.18	-1.19%	593.68	Bullish
NYSE	-106.71	-1.51%	6960.09	Bullish

Source: Telechart

Short Term market outlook:

Bias: Scans showing a positive to neutral bias

Energy: weak

 Primary Trend: sideways to up

Sector	Phase
Consumer Staples	Bullish
Healthcare	Warning
Technology	Bullish
Utilities	Warning
Energy	Bullish
Financials	Warning
Industrials	Bullish
Materials	Warning
Consumer Discretionary	Bullish

Source: Telechart