The Market Direction…

>>>Market Condition Analysis>>> Today marked a second consecutive day of losses for the U.S. equity markets. The weak economic data from the Redbook (retail), PPI, Housing Starts, Industrial Production, and Capacity Utilization reports revealed what saner minds have realized for sometime, i.e. it is premature call for a positive change in the direction of the economy. At best, the rate of contraction has decelerated and we are just beginning to trough.

A quick scan of industry breadth shows pockets of relative strength were found in health care providers, gold mining stocks, and biotech. Yet the volume was below average and therefore their performance only masked distribution patterns of selling into strength. The biggest laggards were coal, auto industry, energy, basic materials, and banking. These industry groups also traded on much lower volume today and as the primary trend of the market is bearish, exhibted classic bearish behaviorial patterns (e.g. price down & volume down).

Today, the DIA and QQQQ joined the SPY and IWM in short-term downtrend status as they were downgraded from their lateral trends. The QQQQ’s long-term or primary trend was also downgraded from up to lateral.

Below is Tuesday’s market summary, market conditon and trend analysis, and support and resistance tables:

Market Summary

• The DIA  closed down -1.42% @ $85.26 and $1.50 below its high and $0.04 above its low on -8.46% lower volume and -23.85% lower average volume. Daily PMI* is @ 2.60 and 5 day PMI is @ 1.05.
• The SPY closed down -1.36% @ 91.64 and $1.65 below its high and $0.06 above its low on -2.65% lower volume and -12.04% lower average volume. Daily PMI* is @ 3.51 and 5 day PMI is @ 1.32.
• The QQQQ closed down -0.97% @ 35.55 and $0.64 below its high and $0.03 above its low on-1.85% lower volume and -8.81% lower average volume. Daily PMI* is @ 4.48 and 5 day PMI is @ 1.75.
• The IWM closed down -1.67% @ 50.50 and $1.34 below its high and $0.18 above its low on +11.07% higher volume and -3.25% lower average volume. Daily PMI* is @ 0.04 and 5 day PMI is @ 0.04.

(*PMI measures and indicates strength of the underylying security’s trading range on a scale of 1-100.)

Market Condition and Trend Analysis

Technical Support & Resistance Levels for Wednesday, June-17-2009

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