Press Them Hard
Thus far, our
recognition of key resistance levels and topping formations on the
Nasdaq and S&P index from commentaries on June 30 and
July 2 have allowed us to accumulate full-size short positions that
have begun to pay very handsomely. At this stage, the recovery the
market has been generating from the June lows appears to have put in a
short term top on July 2 and appears to be gravitating to lower levels
of support. See chart below:
Obviously, the June lows appear to be the key fulcrum here to watch
for market direction. With the volatility indexes puncturing through
their lower Bollinger Bands on Monday, it does not appear that market
internals can support any meaningful bounce off current levels, and
lower prices appear to be in the cards for the near future.
The unemployment report has just been released and the non-farm
payroll figures came in at a decline of 115,000 rather than the 50,000
lost that was being expected. This brings the unemployment rate to
4.5%.
Note that in the just released employment report the aggregate hours
index, which is a monthly proxy for GDP, fell at a 1.4% annual rate in
Q2. This is a sign that Q2 GDP will reveal a decline. Things are just
starting to get interesting now.
Jack Baroudjian is on television again
talking about how the internet is going to save this economy and how
everything is good news this morning. Jack’s Microsoft theory
has now resulted in a decline of nearly 5 points in the stock. Way to
go, Jack!!
Biotechs and technology led the decline yesterday. Look for further
weakness in software, semiconductors, biotech and genomics, or just
play the
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PowerRating).Â
Have a good weekend,
Goran
P.S. Anyone notice the destruction in Juniper Networks
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BRCD |
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and
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PowerRating) were being called the “new 4-horsemen of the
Nasdaq”? My, oh my, how things have changed. At present, we
can’t even identify one horseman because the index has absolutely no
leadership. Without leadership, no rallies can come.