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A Decent Week

  • July 26, 2002
  • Dan Chesler

I’m
sorry this has to be such a short column today. 
Events transpired today to keep me from writing my normal-length piece.
You see, the water heater broke, flooded my basement, and then the dog
slipped and broke his leg, and well, you know how it goes.
Just one of those days.

The market, however, had a pretty decent week after all was said and done.
On both Thursday and Friday, the market managed to claw its way back from
late-afternoon weakness that could have otherwise turned into a full-fledged
resumption of the downtrend. Breadth has
been just so-so following the big Wednesday reversal-rally, with weakness in Semiconductor
stocks
(
$SOX |
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PowerRating) a source of concern.

Balancing this however is strength in Biotech
(
$BTK |
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PowerRating) which has been the leading sector to the upside.
Probably the most important features this week, were that the Nasdaq
(
$COMPQ |
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News |
PowerRating) and the S&P 500
(
$SPX |
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PowerRating)
indexes both managed to hold above their lows from Wednesday, and the huge rally
in the VIX
(
$VIX |
Quote |
Chart |
News |
PowerRating), up to September 2001
levels. 

Next week, I’m looking for a continuation of this week’s gains, and
hopefully on much better breadth statistics to help confirm the rally. 
The Wednesday July 24 low is the most important support level in the
market, potentially marking the low for the next 2-6 weeks.

Have a great weekend.

Dan