It was only just a week ago when the Dow Jones Industrial Average’s (DJI) 50-day simple moving average (SMA) crossed over its 200-day SMA, resulting in a phenomenon known as the ‘Death Cross.’ We’re about to see a second death cross occur for the DJI, this time by its EMAs. The difference between SMAs and EMAs is that the calculation for SMAs focuses on recent closing prices while the calculation for EMAs focuses on the most recent prices. Nevertheless, the pending EMA death cross would cement the notion that the DJI will have a very tough time breaking out of its bearish trend. The next threshold for support is just north of 17,160. Currently, the DJI is fighting to make a comeback. The index is trading down approximately 160 points, after falling as much as 225 points right before noon.

The markets aren’t the only things that are down. Crude oil prices sank even lower during today’s session following the Energy Infromation Agency (EIA) releasing its weekly petroleum status report. During the week ended August 14^th, the US saw a 2.6 million barrel build in inventories to a total 456.2 million barrels. (This comes a week after a 1.7 million barrel draw.) The inventory build was fueled by an increase in imports. However, demand is growing stronger, especially for gasoline products. There was a draw of 2.7 million barrels from gasoline refineries despite them increasing production. All in all, supply is continuing to outpace demand in the oil industry. This has led to prices falling to their lowest levels all year- just above $41.00.

We did have a positive report this morning. The Mortgage Bankers’ Association (MBA) released its weekly mortgage applications report. The composite index rose 3.6% in the week ended August 14^th after rising a meager 0.1% in the prior week. Growth was greatly influenced by the refinancing market. With the average mortgage rate for 30-year conforming loans with balances of $417,000 or less decreasing by 2 basis points to 4.11%, there was a surge in refiance applications. The refinance index rose by 7.0%, more than double the 3.0% increase observed in the prior week. Though unable to breach positive territory, the purchasing index also demonstrated some improvement for the week, decreasing by 1.0% after falling 4.0% in the previous week. With mortgage rates continuing to move lower, we may soon see higher demand for new homes.