Where This Market May Hold
Traders were cautious at the beginning of trade
this morning after increasing concerns about the slothful economy. Share prices
opened lower and continued to test key support levels at the midpoint of
trading.
The service sector of the economy recorded a sixth consecutive month of
expansion, but the rate of growth slowed. The Institute for Supply Management
(ISM) reported that its non-manufacturing index fell to 53.1 in July from 57.2 a
month earlier. Economists had anticipated the index would fall to 55.5. These
economic reports are causing traders to stay on the sidelines until more
positive news re-surfaces.
The Nasdaq Composite
(
$COMPQ |
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PowerRating)
tested support at the 1221 level and fell to an intraday low at 1216. Volume is
still light and the market internals are weak. If the Nasdaq breaks below the
(1220) area, initial support is at 1213 and secondary support is at 1196.
Initial resistance is at 1229 and secondary resistance is at 1235.
The Standard & Poor’s 500
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$SPX.X |
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dropped to its -1.5 Volatility Band at 841.81, then pulled up higher off of
that low point.
Strong Sectors so far
today are: Utility
(
$UTIL.X |
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PowerRating), Gold
(
$XAU.X |
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Retail
(
$RLX.X |
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PowerRating) and Restaurant
Weaker sectors are: Banking
(
$BKX.X |
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PowerRating),
Broker/Dealer
(
$XBD.X |
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PowerRating), Wireless, Semiconductors
[$SOX>X|$SOX.X], Drug
(
$DRG.X |
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PowerRating), Health, Telecom
(
$XTC.X |
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PowerRating),
Software
(
$GSO.X |
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PowerRating) and Oil Service
(
$OSX.X |
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PowerRating).
American Electric Power [AEP|AEP] is bouncing downward after
encountering resistance at the 20-day moving average. AEP is carrying a
3-month
relative strength rank of 8 with a downtrending ADX of 62 from
TradingMarkets.com
Affiliated Computer Services
(
ACS |
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PowerRating) is continuing lower after
moving off its recent low. ACS carries a
3-month
relative strength rank of 20 with a downtrending ADX of 34 from
TradingMarkets.com.
Guidant
(
GDT |
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PowerRating) is pulling back
from the highs. GDT has a
TradingMarkets.com RS3 rating of 95 and an up trending
ADX of 34. Support is at the 50-day moving average (32.90).
CV Therapeutics
(
CVTX |
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PowerRating)
is pulling back from the highs. CVTX has a
TradingMarkets.com RS3 rating of 98.
Verizon Communications
(
VZ |
Quote |
Chart |
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PowerRating) is bouncing downward from
resistance at the 20-day moving average. VZ is carrying a
3-month
relative strength rank of 13 with a downtrending ADX of 47 from
TradingMarkets.com.
Nasdaq Breadth:
Adv: 1076 UpVol: 13705670
Dec: 2149 DnVol: 57179452
Net: -1073 Net: -43473782
NYSE Breadth:
Adv: 980 UpVol: 14100680
Dec: 2179 DnVol: 68643727
Net: -1199 Net: -54543047