What Might Bring An Afternoon Rally
Yesterday the markets shook off the negative
consumer confidence numbers, and this afternoon traders will be looking for possibly
the same.
At the midpoint of trading, the broader
indexes are trading lower. The drop in the markets was triggered by weaker-than
expected news that the U.S. economy slowed down significantly in the second
quarter. The Gross Domestic Product (GDP), rose at a lower-than-expected 1.1%
annual rate in the April-to-June period, the Commerce Department reported. This
is down significantly from the first quarter’s revised 5.0% growth rate,
previously estimated at 6.1%. GDP in the latest period was expected to rise by 2.2%.
The Dow Jones Industrial Average
(
$INDU |
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News |
PowerRating) has intraday support around 8550
with secondary support at 8500. Initial resistance is at 8650, with
secondary resistance at 8655.
The Nasdaq Composite
(
$COMPQ |
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Chart |
News |
PowerRating)
traded negative in the first half of trading. Volume is lighter so far and the
internals are bearish. Support was at 1312/1314, tested at the
intraday low of 1311. A further break down below this level could lead to the
next support around 1295 to 1287. On the upside, watch for initial resistance
at 1320/1322 with secondary resistance at 1330.
Stronger sectors on the day are: Utility
(
$UTIL.X |
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Chart |
News |
PowerRating), Gold
(
$XAU.X |
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Chart |
News |
PowerRating), Health
(
$HMO.X |
Quote |
Chart |
News |
PowerRating),
Natural Gas
(
NGU2 |
Quote |
Chart |
News |
PowerRating) and Telecom
(
$XTC.X |
Quote |
Chart |
News |
PowerRating). Biotech
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) started out negative, but has had a very strong turnaround to
trade positive.
Weaker sectors on the day are: Semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), Computer-Hardware
(
$XCI.X |
Quote |
Chart |
News |
PowerRating), Networking,
Software
(
$GSO.X |
Quote |
Chart |
News |
PowerRating), Internet
(
$DOT.X |
Quote |
Chart |
News |
PowerRating), Drug
(
$DRG.X |
Quote |
Chart |
News |
PowerRating),
Cyclical
(
$CYC.X |
Quote |
Chart |
News |
PowerRating).
Coventry Health Care
(
CVH |
Quote |
Chart |
News |
PowerRating) is rallying
out of a double bottom on the daily chart with increasing volume.
Beazer Homes
(
BZK |
Quote |
Chart |
News |
PowerRating) is beginning to fail
out of a counter trend rally. BZH is carrying a
3-month relative strength rank of 18 with a downtrending ADX of 38 from
TradingMarkets.com.
Alcon
(
ACL |
Quote |
Chart |
News |
PowerRating) is rallying out of a 1,2,3
bottom with increasing volume. Alcon has a
TradingMarkets.com RS3 rating of 83 and a an up trending
ADX of 35.
Medimmune
(
MEDI |
Quote |
Chart |
News |
PowerRating) is starting to pull back
breaking out above the 50-day moving average on on expansion of range. MEDI
is holding a
3-month relative strength rank of 77 from TradingMarkets.com.
Varian Medical
Systems
(
VAR |
Quote |
Chart |
News |
PowerRating) is rallying out of 1,2,3 double bottom. VAR has a
TradingMarkets.com RS3 rating of 82 and up trending
ADX of 36.
Nadsq Breadth:
Adv: 1233 UpVol: 161841506
Dec: 1892 DnVol: 627136700
Net: -659 Net: -465295194
NYSE Breadth:
Adv: 1510 UpVol: 37575680
Dec: 1626 DnVol: 59432564
Net: -116 Net: -21856884