Vacation Season Starts

Vacation time is starting, as evidenced by the volume today. Of course, computers don't take vacations, so they are still providing "liquidity" by front running the few orders that are coming in. 1008, our old resistance point, looks like a pivot point now, with 1020 or so the top, 995 or so the bottom. The momentum is shifting: it looks like a correction is coming, but the way things are going, a 1% drop might be a "correction".

The Nasdaq sure looks like it is going to roll over. If it doesn't hit the 50dma, I will be surprised. MACD has crossed over here, but last time it did, we got a very small drop.

The Dow indsutrials still look like they want to go up some more, and they just might. They have taken the lead over the Nasdaq, which is usually, but not necessarily, bearish.


The Russell 2000 has also strengthened recently, but still looks like it is loosing momentum. It also appears to be ready for a pullback.


Here is the relative sector performance since the Meredith Whitney rally started on July 13. Not surprisingly, the financials have lead, but the basic materials are strong, and even energy has performed on par. Trashing the dollar may be getting us a market rally here, but at some point it's going to come back and bite us.

I'll have the new highs update shortly