INDEX UPDATE
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Sorry that I do not have the time to post regularly.
Overall market is still very healthy, so do not worry about today's performance. It was a bit tricky, in light of the bond rally, which I also got caught in - thinking that the market would run up at the end of the day.
Basicly, the overall market, except for the DOW and large Hi-Techs, is overbought. There are many new highs amongst the indexes, and the technicals on many of these indexes were severly overbought, that may be a reason for the pull-back today.
However, there was still some divergences - the XBD(BROKERS) was up 25 points, and the XAL(airlines) was up 2 points, even in light of DELTA's bad announcement yesterday. The market is still healthy - certain sectors just need a break.
The NASDAQ, just recently, has been setting new highs, however the NDX(mainly the big NASDAQ stocks), and the SOX are the only 2 Hi-tech indexes which have not set new highs, but still showing healthy movement. It appears that the smaller NASDAQ stocks are moving up at a faster pace than the larger NASDAQ stocks. Of course we all know that the DOW is the laggard, but we also need to include the NASDAQ biggies into that category, to a certain degree(DOW is still the bigger laggard)).
The bigger stocks (DOW & NASDAQ), will need to catch up a bit to keep the market moving up and they will. I believe that the leaders to pull the DOW up further are the XOI(oils) and the DRG(drugs). Yes the XBD,XAL and BKX are showing strength also, but they are already at or very close to their highs.
Now for tomorrow - the bias for the overall market is still to the downside, and currently there are no CLASS 1 or CLASS 2 BUYs on the indexes; however the XOI(OILS) is getting close to a CLASS 2. The SOX can still come down a bit more. I do not believe that we will be seeing any CLASS 1 or CLASS 2(few) BUYS before the market reverses, since the divergence between the overall market and the interest rates are getting too large (GUITAR THEORY), especially if the interest rates continue down and sets a new 52 week low, which is just around the corner.
Then there is the fundamental matter of the economic news tomorrow which will have an effect on determining the direction.
The TYX(interest rates) are about to test a major support line at 6.288%, and it closed today at 6.316. Breaking the 6.288% barrier will be major, and a very strong indicator that the stock maket will continue up. The other major issue, of course, will be the earning announcement.
Good nite all. Will be on the road for the next few days - seeya |
