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Testing the lows

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The indices gapped down from the open, filled their gaps, and then tumbled to set lower lows. The INDU bounced off a low of 8479, SPX 920, COMPX 1486 but have so far been trading weakly. Decliners were leading advancers by better than 2:1 on both the COMPX and the NYSE, but have recovered, with declining volume leading advancing volume 3:1 on the NYSE and the COMPX.

The action in the INDU violated the low ascending trendline of the bear wedge printed on its daily candles, while none of the other indices violated theirs. The INDU's recovery off its lows returned the index back into its range, and the gradual climb has all of the indices continuing to trade within the narrowing ranges depicted in last night's Market Wrap.

The US Dollar Index (dx00y) has been getting sold aggressively following the decisions of the Bank of England the European Central Bank to leave rates unchanged, followed by the weekly US initial jobless claims coming in at 425,000 new claims, bringing the 4 week moving average of initial claims to 446,000, the highest level in 1 year. Continuing claims rose to 3,665,000. As Jim Brown noted in the Market Monitor, the end of the war has done nothing to end the persistent problem of unemployment. DX00Y was trading below 95.00 this morning, setting new bear lows, as June gold rose to a high of 349.70, up better than 7.50 per oz, with the Amex Gold Bugs Index (HUI) up over 3 points to over 133 and the Precious Metals Index (XAU) up over 1 point, challenging the 70 level.

Other than precious metals, sectors are showing red across the board except for Consumer Cyclicals, with the only winners being Gap Stores +5% and TJX +4.34%.

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