What’s Propelling The Rally Off A Short-Term Oversold Condition…
The intraday broader market activity is
in limbo in the first half of trade.
The markets are wavering between their resistance levels and breaking down lower to
test their support. The Dow Jones Industrial Average
(
$INDU |
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immediately got off to a bad start when the news that a suicide attacker
crashed a carful of explosives into a U.S. Consulate guard post in Karachi,
Pakistan, leaving eight people dead and at least 45 others injured. Then the
sell-off continued when the University of Michigan reported a downturn in US
consumer spending, raising fears that it may be slowing
down. This could impact the overall economic recovery. The
early negativity, however, produced a short-term oversold condition. Coupled
with indications of fear and panic suggested by a spike in the VIX, an intraday
rally from the lows ensued. Only time will tell whether the rally gains
traction.
The Nasdaq Composite
(
$COMPQ |
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the open, but the majority of technology sectors are negative, including the PHLX
Philadelphia Semiconductor sector index
(
$SOX.X |
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PowerRating). The SOX is trending
sideways today.
The big question still remains where are we going
with this market? The Nasdaq 100
(
$NDX.X |
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lows not seen since 1989. TradingMarkets.com Analyst Mark Boucher has some
interesting insight on the current economic climate.
Click here for Mark’s comments.
Microsoft (MSFT)
is forming a double bottom on the daily chart, with resistance at 56. A break above 56.00 with increasing
volume could be a sign of a new leg
upward. MSFT is trading at 54.98, up .76.
This morning
August gold
(
GCQ2 |
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up over $1.00. August gold has influence on the movement of gold stocks, and we are seeing positive movement in
the
Phlx Gold & Silver Index ($XAU.X).
Some of the stocks in the XAU include Anglogold (AU),
Barrick Gold (ABX),
Newmont Mining (NEM)
and Placer Dome (PDG).
August gold is trading at $321.10 an ounce, up 2.40.
The Biotech index
(
$BTK.X |
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moved up on strong volume. This group may provide for some nice intraday
pullbacks to the long side. Keep an eye on the Biotech HOLDRs
(
BOH |
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PowerRating)
and individual stocks such as
(
AMGN |
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(
BGEN |
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(
CHIR |
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(
IMNX |
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PowerRating).
Quest Diagnostic
(
DGX |
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PowerRating) retouches the
20-day MA. Quest is coming into some chart resistance, in addition to the
20-day MA. Nimble intraday traders may want to watch how DGX reacts at this
level (88 Dollars). If it bases here, it may provide for a quick scalp long.
If it can’t hold this level, then it could provide for a nice short.
NYSE Breadth: 2002-06-14 13:03:57
Adv: 1122 Dec: 1984 Net: -862
UpVol: 2119821 DnVol: 7176516 Net: -5056695
Nasdaq Breadth: 2002-06-14 13:03:57
Adv: 1213 Dec: 1974 Net: -761
UpVol: 2633995 DnVol: 6813564 Net: -4179569