INDUSTRIAL AND PRECIOUS METALS LEAD MARKET LOWER -- GOLD FALLS $13
MATERIALS FALL HARDEST... In a generally weak market, Materials are the weakest sector. Most of that selling is coming in industrial and precious metals. In addition to rising rates here in the states -- and a stronger dollar -- a statement out of China that they may take more aggressive steps to slow down their economic expansion, is contributing to the heavy selling of metals. Gold has fallen $13 to $386 and gold stocks are down 7%. Copper, aluminum, and steel stocks are also falling.
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XAU STILL DROPPING... Precious metals are the hardest hit today. The XAU Index is down more than five points. The XAU has been trading under its 200-day average and its January low for two weeks. Today's selling is a continuation of that technical breakdown. Rising interest rates and a rising dollar have been the main reason. Two of the weakest XAU stocks are Freeport McMoran Copper & Gold and Newmont Mining.
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INDUSTRIAL METALS TUMBLE... Stocks related to industrial metals are also tumbling today. Alcoa (aluminum) has fallen under its 200-day moving average. Phelps Dodge (copper) is bearing down on its 200-day line. US Steel has tumbled to a four-month low on heavy volume. There's good and bad news in the commodity price drops. The good news is that it reduces inflationary pressures. The bad news is that it hints at a slowdown in the global economy.
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S&P 500 SLIPS UNDER 50-DAY AVERAGE... The S&P 500 SPDRs are slipping under their 50-day moving average today. That negates last week's upside action and puts the S&P back into a short-term trading range. The Nasdaq 100 Shrs (QQQJ) are testing their 50-day line. Technology is also showing relativae weakness today. The only pockets of relative strrength are in defensive groups like consumer staples, energy, and utilities.
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