Market Running Out of Gas
<<Ridgeland, MS, JUN 17, 2004 (EventX/Knobias.com via COMTEX) -- The S&P and Nasdaq are building their second "lower high" this year at resistance formed by their upper trend lines. The semiconductor index (SOX -2.9%) has also formed a second "lower high" at the upper trend line. Bulls were looking for a breakout above resistance here, but this now seems increasingly unlikely. Last week the S&P spent 2-days above the trend line, but resistance is holding this week. On Tuesday and Wednesday, Knobias reported the high level of investor complacency in the market.
Another market-leading index, the AMEX Broker/Dealer Index (XBD), is down (0.9%) this morning, near its low of 2004. This is despite earnings surprises from both Lehman Brothers (LEH) and Bear Stearns (BSC) this week.
Yesterday, the VIX closed the session at 14.79 a level that ended equity rallies three times this year.
Also reported yesterday, the Investors Intelligence Poll for the week ended Jun 15 revealed investment advisors were excessively bullish. The Bull/Bear ratio increased to 3.18 from 2.45 last week. The current ratio is in the upper extreme of its recent range. It last reached this level in January this year, coincident with the end of the 2003 S&P rally.
Currently all 10 DJ sectors are in negative territory.>> |
