Today's Markets

The markets gapped down at the open. There were several reasons for this. There was a hangover from yesterday's session. PPI was high (see post below), indicating inflation is still an issue. In addition:

A gauge of manufacturing in New York State contracted in July for the third consecutive month, though the rate of decline was less severe than in June, the New York Federal Reserve said in a report on Tuesday.

The New York Fed's "Empire State" general business conditions index came in at minus 4.92 in July from minus 8.68 in June, while its gauges of inflation also posted increases.

Industrial production is one of the areas of the economy the NBER analyzes when it is looking to date a recession. The Empire State survey has not been doing well over the last few months. In addition to that:

U.S. retail sales rose a disappointing 0.1% in June despite nearly $50 billion in stimulus checks for consumers, Commerce Department data released Tuesday revealed.

Sales were boosted by higher prices for gasoline, food and other consumer goods. The figures are seasonally adjusted but are not adjusted for inflation.

It was the weakest sales report since February's 0.2% decline.

Sales in June were held back by the biggest drop in auto sales in more than two years. By contrast, sales at the malls and shopping centers were relatively healthy, stimulated by the tax rebate checks,

Excluding the 3.3% drop in auto sales, sales rose 0.8%, the slowest in three months.

Excluding the 3.3% rise in gasoline station sales, sales fell 0.5%, the biggest drop since December. Excluding both autos and gas, sales rose 0.2%.

Despite Washington pumping money into the economy, retail sales are lackluster.

So, there was a lot of negativity at the open. Prices moved lower a bit more and then gapped down around 9AM CST. Then prices started to move higher. They crossed over the 10 and 20 minute SMA, then rose a bit before hitting resistance at the 50 day SMA. Prices fell back to the 20 minute SMA and then printed two strong bars right before 11 AM to get over the 50 minute SMA. Prices continued to rise until a little after 12 when they ran into upside resistance at the 200 minute SMA. Prices dropped a bit and then everything moved sideways before making another move higher. Right after 2 PM prices moved through the 200 minute SMA. But they couldn't hold momentum and they fell into the close.

Despite all of the positive technical developments in the day -- the continued moves through upside resistance and the important move through the 200 minute SMA near the close, prices just couldn't keep the momentum going. That indicates there is still a great deal of concern out there. Also note that prices fell into the close, indicating traders don't want to hold anything overnight which is another bearish sign.