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Wednesday, July 14, 2010

Treading Water

A flurry of good earnings reports were offset by a batch of crappy economic reports, and the market dis a whole lot of nothing today. The exponential 50 and 200dat moving averages have met, and are now moving in near lockstep, something you would expect to put up some fearsome resistance, and apparently it is.  The market is having a very tough time getting through 1100, having failed for the second day in a row, an that is, at this point, the real test of whether we go high or if this is another in a long succession of bounces. So far, I am leaning toward the latter.

The NDX was expected to get a boost from INTC, which it did, but unfortunately realtive weakness in AAPL spoiled the party. Even decent moves by the other big kahunas of the NDX, MSFT and CSCO, didn't get the job done. This seems to be having a tough time with it's 50dema, but the 200 should be support.

The Russell 2000 was very weak today, and the rally that should have been never got off the ground. It is just about to meet the descending 50dema, which it almost tested today, and that could very well push ot back.

TNX gapped down pretty big in the morning, did a perfect fill the gap rally, then turned tail and headed down, only to fill another gap left a few days ago. This looks like a classic case of a dead cat bounce, and the trend here is still down.

Another bellwether of the economy, oil price, has been going nowhere since the collapse in early May. I don;t think I have seen all 4 moving averages in the same place on a chart before, but this one is close enough. It is stuck in an ever narrowing range, which will probably lead to a big move soon, but in an unknown direction.

The FOMC minutes were released in the afternoon, which also weighed on the market. The Fed is finally acknowledging deteriorating economic conditions, and although they won't admit it, there isn't a whole lot they can do about it. We will get a clearer picture in the nexxt couple of weeks as the bulk of earnings come out.

I will have the new highs update shortly.

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