A Boring Week Mercifully Draws To A Close
The Nasdaq has managed to close higher for the
third straight session, but met
resistance at its 10 dma yesterday which turned it back in the final hour of
trading. It appears that a zone in the NDX 100 of 1766-1777 is going to be
key to overcome for continued upside to materialize. If this zone is not
overcome, the Nasdaq will appear to have complete a three-wave corrective
bounce from last week’s low, and we will look for more downside.Â
Interestingly, the VIX has declined significantly for five straight sessions
and now sits at 21.91. I’m aware of the 10-day Arms index reading, but this
exceedingly low VIX reading doesn’t make me optimistic for a significant
bounce here. As I have stated from early this week, I believe a bit more
downside is in the cards before a sustained, multi-week mini-uptrend can
ensue.Â
Of course, as we know, this is a news-driven market, and with the FOMC meeting
rapidly approaching next week, we may be in store for some unusual volatility.
In summary, watch yesterday’s high in the NDX100 as a fulcrum for that
index’s strength. The NDX100 is attempting to penetrate the June 14
candlestick, which was exceedingly bearish (shaven top, shaven bottom).Â
Without some positive fundamental news, which we certainly don’t have this
morning, I find it unlikely that the market can overcome this resistance zone
today.
Special attention to retailers today as both The Gap
(
GPS |
Quote |
Chart |
News |
PowerRating) and Bed,
Bath and Beyond
(
BBBY |
Quote |
Chart |
News |
PowerRating) delivered less than stellar news to the
hopeful. The retail
sector was also downgraded by a major brokerage today (finally). Also
watch
some of the healthcare and managed care stocks which are at nosebleed
valuations.Â
(
THC |
Quote |
Chart |
News |
PowerRating),
(
CAH |
Quote |
Chart |
News |
PowerRating),
(
UNH |
Quote |
Chart |
News |
PowerRating),
(
LNCR |
Quote |
Chart |
News |
PowerRating) are all at
ridiculous valuations.
Goran