SPX 5% range to end next week
After 3 big up days, the
OIH (+ 12.5%) and XAU (+ 10.4%) finished red with the OIH -0.8% and XAU
-2.9%. Aetna
(
AET |
Quote |
Chart |
News |
PowerRating) imploded (-16.8%) on Q2 earnings shortfall, and
that took our focus list healthcare stocks down. The SPX finished
-0.4% at 1263.20 just above the 200-day ema while the Dow was flat (-2 points)
due mostly to Pfizer
(
PFE |
Quote |
Chart |
News |
PowerRating) (+2.2%) and Merck
(
MRK |
Quote |
Chart |
News |
PowerRating) (+2%). The QQQQ
was -0.7%, $COMPX -0.8% and $TRAN -1.4%.
The transportation index, which is -14.4% from its bull cycle high, is now in
primary downtrend territory. It has joined the ranks of the following: QQQQ -17.9%,
$COMPX -15.3%, SMH -28.5%, XLI (Industrials) -12.5%
and XLY (Consumer Discretionary) -10.6%. The SPX was -8.1% from
1326.90 to 1219.29 and has traded above/below the 200-day ema in a 5% range
since 6/6/06.
NYSE volume was 1.8 billion shares yesterday with the volume
ratio of 37 and breadth – 455. I expect the generals will hold the
averages into month end, as they have done a good job so far this week with the
mark up, and what looks like some help from the PPT during the current Middle
East crisis. John Crudelle of the New York Post wrote an excellent piece
on Tuesday about the PPT (Plunge Protection Team), and how the Post has filed
under the Freedom of Information Act to make public the minutes of any PPT
meetings. There have been so many mystery moves out of nowhere, and always
at the time the SPX is falling out of bed during some kind of some significant
major news. Mr. Bernanke (Fed chief) was pressed to admit by
Representative Paul that there is a PPT, but Bernanke danced around the
Representative’s questions. The admitted intervention in 1987 by the PPT
from a former Fed governor, now seems to have become a regular tool, and that
would make Enron look like an odd-lot. They should simply stay the hell
out of the free market.
The SPX two month 5% trading range between 1280.38-1219.29
will resolve itself after month end in the first few days of August. Any
significant move out of the range to the upside will be another excellent
selling opportunity.
Have a good trading day,
Kevin