Swing Trading Strategies & Stock Picks Since 2003

Dow Jones Industrial Average

Key Statistics

Open: 8528.93

High: 8560.44

Low: 8393.95

Close: 8447

Change: -82.38 (-0.97%)

Prev Close: 8529.38

RSI: 36.86

MACD: -5.91

Snapshot

• Dow ended -82.38 (-0.97%) points lower, S&P 500 down 0.9% and Nasdaq down 0.5%.
• Consumer Confidence unexpectedly drops in June.

Current Market view– Bearish

Market Strategy

The medium term view is certainly bearish. Traders should not initiate fresh longs at current levels. Prefer staying short. The market is expected is to decline further in coming few trading sessions.

Market Commentary

U.S. stocks fell on Tuesday as an unexpected drop in consumer confidence cooled recent optimism about an economic recovery. The June Consumer Confidence index from the Conference Board fell to 49.3 from a revised 54.8 in May, versus forecasts for a rise to 55.3.

The Dow Jones industrial average .DJI slipped 82.38 points, or 0.97 percent, to 8,447.00.

Gloom among consumers is a major obstacle as their spending is a major driver of corporate profits and accounts for roughly two-thirds of U.S. economic activity.

Industrial, energy, financials and material stocks led the market decline on Tuesday.

Shares of Caterpillar Inc (CAT), a maker of bulldozers and excavators, slumped 4.9 percent to $33.04, while on the technology front, International Business Machines Corp (IBM) tumbled 1.3 percent to $104.42.

On Nasdaq, chip maker Qualcomm, off 1.9 percent at $45.20, was the worst drag.

Sliding oil prices gave investors a reason to sell some energy shares, with Exxon Mobil (XOM) down almost 1 percent at $69.91.

Crude oil futures CLc1 fell $1.60, or 2.2 percent, to settle at $69.89 a barrel.

Shares of U.S. oil refiners such as Sunoco Inc (SUN) and Tesoro Corp (TSO) dropped after Goldman Sachs cut them to "sell" from "neutral."

On the New York Stock Exchange, about 1.33 billion shares changed hands, below last year's estimated daily average of 1.49 billion, while on the Nasdaq, about 2.13 billion shares traded, below last year's daily average of 2.28 billion.

Declining stocks outnumbered advancing ones by a ratio of about 5 to 4 on both the NYSE and the Nasdaq.

Economic News

The S&P/Case Shiller 20-city home price index fell 18.1% in April from a year ago versus forecasts for a drop of 18.6%.

The Day Ahead

It is going to be an action packed day at the economic news front.

The June reading on private-sector employment from payroll services firm ADP is due before the start of trading. Employers are expected to have cut 363,000 jobs from their payrolls in June after cutting 532,000 in May.

The Pending Home Sales index from the National Association of Realtors is due at 10:00 AM ET and is expected to have risen 1.1% in May after rising 6.7% in April.

The Institute for Supply Management's June manufacturing index is due at 10:00 AM ET and is expected to have risen to 44 from 42.8 in May, according to forecasts.

May construction spending is due at 10:00 AM ET and is expected to have fallen 0.5% after posting a surprise rise of 0.8% in April. The Commerce Department report is due out after the start of trading.

The weekly crude oil inventories report from the Energy Information Administration is due shortly after the start of trading.