Key Zone For Semis…And The Rest Of The Market

July 17, 2002
Daniel Beighley

After
gapping up this morning, the markets reversed course and held
downtrends until 10 am ET, where two brief rallies brought the major indexes to
positive closes. Leading the action was biotechnology, Internet, and healthcare,
while computer hardware, gold and silver, telecoms, insurance, and
semiconductors represented the day’s weakness.Â Â

Despite Intel
(
INTC |
Quote |
Chart |
News |
PowerRating),
up 5.88%, shaking off its negative earnings announcement, The Semiconductor
Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), closed down 1.27%, below its downward trend line, and
just above its 20-day moving average. This zone is key for this leading sector,
and most likely for the rest of the markets. Until proven otherwise Dave
Landry‘s big blue arrow remains down.

U.S. Treasury Bonds were
down 1 ’02 at 103 ’25.

In economic news, building permits came in at 1.700
million vs. the expected 1.660 million, and housing starts came in at
1.672 million vs. expectations of 1.690 million.

Market breadth was mostly
positive, with NYSE advancing issues over declining issues by a ratio of
1.19, and down volume over up volume by a 1.09 ratio. Nasdaq advancing issues
over declining issues came in at 1.18, and up volume beat down volume by a 1.43
ratio. The
VIX
was down 2.25 at 39.88. The TRIN
was unchanged at 1.26.

Above-average volume held the Dow, the S&P 500
to closes near the bottoms of their daily ranges, while the Nasdaq closed just
below its 20-day MA. The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), up 0.48%,
closed in the lower half of its daily range.

Chip giant Intel (INTC),
up 5.88% at 19.44, missed its second-quarter earnings consensus with profits of
10 cents a share. Also
in the semiconductor business, Teradyne
(
TER |
Quote |
Chart |
News |
PowerRating), down 15.03% at 18.48,
beat its second-quarter earnings estimates by 2 cents with a loss of 28 cents a
share. Another chip maker, Motorola
(
MOT |
Quote |
Chart |
News |
PowerRating),
up 4.26% at 15.15, reported its sixth consecutive loss, though its revenue came
in better than expected.

Financial services company
Citigroup (C),
up 2.01% at 36.93, reported that it earnings
rose 15 from a year ago, with profits of 78 cents a share. The First Call
consensus was for 77 cents a share. Investment
bank J.P. Morgan Chase (JPM),
down 1.26% at 28.14, missed its second-quarter earnings consensus by 7 cents
with profits of 58 cents a share.

Software company Advent Software (ADVS),
up 2.42% at 19.02, reported earnings worse than expected with a loss of 35 cents
a share vs. the Multex consensus of a loss of 2 cents a share.

Auto maker Ford Auto
(
F |
Quote |
Chart |
News |
PowerRating), up 0.16% at 12.52, said that it has
returned to profitability for the second quarter.

Aviation and aerospace giant Boeing
(
BA |
Quote |
Chart |
News |
PowerRating), up 5.06% at 42.94,
exceeded its second-quarter estimates, and also reiterated its outlook for 2002
and 2003.

Conglomerate United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating), up 4.92% at 64.95, also
beat its analysts projections by exceeding second-quarter profits and increasing
its outlook for the rest of the year.

Key Zone For Semis…And The Rest Of The Market

BUY THE FEAR, SELL THE GREED

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