<<The big concern relates to energy and its rise. The argument will
continue to rage about whether it should or should not be excluded from
the mix. As we have said before and as the recent debate with OPEC has
highlighted, the rise in energy prices cannot be properly labeled
inflation caused by market forces. Output was artificially restricted
with the intent to raise prices. OPEC has agreed to increase supply
but
talked of the west and its taxes on energy being a problem with the
cost.
Then the President has talked of opening the strategic petroleum
reserve,
and that has had its impact on the debate as well.
*
What all of this shows is that it is not an economic or market force
impacting the price of oil, just governments, i.e., non-market forces.
The result may be higher prices, but the idea that the Fed will have to
work against higher prices with rate hikes or that managing monetary
policy by other means will result in lower energy prices is wrong.
There
is nothing wrong with the economy itself that needs fixing. As we
pointed
out last night, we have to deal with OPEC directly and not try to
dictate
energy prices by trying to speed up or slow down the economy.
*
Our plan.
*
Today we saw what looked to be the start of another upward leg for the
Nasdaq, meaning a higher low if we are right. We were in there
pitching
as we saw the stocks we were watching start back up on good volume from
support levels. If the move continues, we will continue to do the same
thing tomorrow. As we noted Tuesday, the Nasdaq could find support
quickly, and that is why we were approaching all of our existing and
potentially new downside plays with care, ready to exit. We closed
some
covered call positions and put plays early today and were taking upside
positions for the most part.
*
Tomorrow we will continue to do the same as we see stocks continue to
move
up on solid volume. Do not let your guard down for a minute. Remember
the lesson of the climb out of the bear: we see moves up that start,
hesitate, pullback slightly, then move up. Even then, we have not had
any
lasting breakouts. Thus, we keep our trailing stop losses in as
positions
move up. We take profits when price/volume action starts to reverse or
the overall market weakens. In other words, when what made us want to
get
into the position starts playing out, we take profit to get out and
look
for the next opportunity.
*
These rallies have rewarded those who step in early. Doing so,
however,
puts you at risk of a false move; that is why we keep that protection
in
place. We saw a false move on Tuesday. Today the move looked for
real.
We are looking for more.
*
Nasdaq:
July high: 4274.67 closing; 4289.06 intraday high.
Resistance: Some at 3900 and the 50 day moving average at 3955.51.
Support: 3850. 3795 to 3765.
*
S&P 500:
All-time closing high: 1527.46
All-time high: 1552.87
Support: The thick ice was chipped hammered on today, but again it
held.
1477 to 1485 are April, May and June tops. The 50 day moving average
is
at 1483.21. 1455 represents some up trendlines. The 200 day moving
average is at 1445.06
*
Dow:
April closing high: 11,287.08
April intraday high: 11,425.45
Recent resistance at 11,315 to 13,120.
Support: August closing top at 11,176.14 again held today on the
close.
Recent low of 11,103.01 held today intraday. Still working on a decent
looking handle.>> from investment house daily
* |
