Stock Market Update -Jul 12th

The downtrend in the market continued this week (see chart). We are hovering around the 880 level on the S&P500 that I mentioned last week. The coming week's earnings will help to decide whether we break down below this level, or whether we bounce back up. GM emerged from bankruptcy this week, a lot earlier than first expected.

We got some encouraging news from the unemployment data this week. For the first time in almost six months, the number for new claims dropped below 600,000. Every week I've been reporting this figure over 600,000, but this week it came in at 565,000. We also saw another bank shut down by regulators (list).

Commodities: Commodities continue their downward slide. Oil prices continued to drop, closing just under $60 per barrel. Gold closed the week around $912, while the US Dollar is still in a trading range. Last week I said "We could see oil, gold, and other commodities take a tumble from here".

Bond prices were up again, as stocks fell (how do you sell billions in bonds? ...just sink the stock market!)


Next week we get get earnings reports from some of the big banks (BAC, C, JPM, GS), as well as IBM, INTC, GOOG, and GE. We also get a few economic reports, so we could see more volatility, and perhaps get a better sense of whether the market will continue to head down.

Market analysis: The downtrend is in place now, with uncertain times ahead. This would be a good time to either hedge your positions, or exit on any bounce. Meanwhile, the debt clock keeps ticking (see left icon), now over $11.5 trillion!

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