Pre Market - July 26th 2007

Home builders taking us down hard this morning. More home builders have reported earnings this morning and the construction sector just keeps getting worse. Revenues from home and commercial construction companies just keeps showing more gloomy data on the sector. We all know that the home construction is weak but the earnings results are showing some erosion in the commercial markets as well. Housing, construction materials, banks, mortgage lenders all suffering big and looks like even more drops in these areas are yet to come.

Ford (F) released good results this morning but it is not enough to pick up the futures this morning.

Crude oil is heading back up again and we are now nearing $77. Exxon Mobil (XOM) just now released their numbers and they miss! An oil sector company missing their numbers is scary to me. The energy sector has been one of the sectors that has been keeping the market going up over the past year. If the oil sector losses it's strength (and no other sector steps in to take over the strength) then I'm afraid we could be heading into a full blown market correction.. or worse.

Yesterday I said that the trading activity represented "uncertainty". And that is why I said I would not be entering any new swing trades yet. When the market gives a technical indication of uncertainty it is too risky to take on a new swing trade. Today with the futures down over 100 we are in for a very volatile day. If we do not get a bounce today and close higher than where we open then we will be retracing back into the recent trading range on the major indices and that will add more fear to the markets. We are likely to have a rough day today. There must be strong strength today in at least one sector to keep us healthy.

See the DOW chart here for our support level.

At 8:30 durable goods data will be released. That will move the futures if the data is good. If it is bad then futures will tumble more.