Where An Opportunity May Soon Come
On this first trading day
of the week, the markets are bleeding red. The Dow Jones Industrial Average
(
$INDU |
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at one point was down over 300 points. The Nasdaq Composite
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$COMPQ |
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is trading in a descending triangle on the intraday, and is poised to fall
lower. The Market internals are negative.
The VIX
(
$VIX |
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PowerRating) is in the zone of last
September’s highs, indicating that fear is at a high level. Keep watching our Market Bias page for alerts that may
signal a short-term low. When fear hits an extreme, that’s where an opportunity may come.
The only bright spot on the day is that Business
Inventories came in up +0.2%, beating Street expectations. This is the first gain
since January 2001.
Concerns about the US economy caused the dollar
(
DXU2 |
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ECU2 |
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for the first time in two years, and fell below ¥115.80
(
JYU2 |
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PowerRating) for the
first time since late last September. The euro has jumped from about 87 cents in
April.
A sharp drop in the dollar increases concerns about the already fragile
financial markets and hopeful economic recovery. As foreign investors, now less
bullish on the U.S. market, see the returns on dollar-denominated assets shrink,
they may move to pull out of US stocks and send back their money —
intensifying the stock market’s decline.
Some traders are looking for some positive
remarks from Alan Greenspan at tomorrow’s Fed meeting. There are rumors that are
floating around saying that the Fed may cut rates by .25 of a point.
Baxter International
(
BAX |
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PowerRating) is moving in a
counter trend rally in the midst of its recent downtrend. BAX carries a
3-month relative strength rank of 9 with a downtrending ADX of 44 from
TradingMarkets.com.
Kronos, Inc.
(
KRON |
Quote |
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PowerRating) is trading in a
triangle near the level of its recent low. The stock has been hit hard, down
nearly 60% from the May high. KRON is holding a
3-month relative strength rank of 17 from TradingMarkets.com.
All of the sectors are in the red today.
Nasdaq Market Breadth
Adv: 855 UpVol: 27863170
Dec: 2433 DnVol: 68712902
Net: -1578 Net: -40849732
Breadth: 2002-07-15 13:41:25
Adv: 511 UpVol: 12549790
Dec: 2697 DnVol: 94538821
Net: -2186 Net: -81989031