Why Is 1998 Relevant To Today’s Market?
In today’s choppy
trade, stocks fell, driving the Dow Jones Industrial Average
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toward its lowest close in almost four years. The Dow has fallen about 15% in the past month, erasing gains from a rally that started after its
July 23 low. All of the usual suspects showed up for today’s slide: Warnings
from Weyerhaeuser
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MYG |
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lag forecasts; and the possibility of war with Iraq. The Dow declined 188.88, or
2.5%, to 7683.27. We have not seen these levels since Oct. 1, 1998.
The Standard &
Poor’s 500 Index
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Nasdaq Composite Index
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1182.28. The Nasdaq was positive off and on through out the session, with the
Phlx Semiconductor sector
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$SOX.X |
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bias.
The stronger sectors
on the day were Biotech
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$BTK.X |
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$XAU.X |
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Trucking with Roadway
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ROAD |
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YELL |
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leading the way; Insurance; Steel; and as mentioned earlier, Semiconductors
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$SOX.X |
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PowerRating). Weaker sectors today include Paper,
with
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WY |
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TIN |
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$XAL |
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Chemicals; Aluminum; and Utilities
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$UTY.X |
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As far as volume is concerned: 1.59 billion shares traded on the New York Stock Exchange, 24%
more than a week ago. Almost two stocks fell for every one that rose on
the NYSE. Four declined for every three that advanced on the Nasdaq Composite.
Federal Reserve
policy makers, in an unusual 10-2 vote, held interest rates steady, citing a
weak economy, and suggested the prospects of war with Iraq may hinder an
economic recovery. Treasuries rose after the Federal Reserve said weakness
remains the biggest threat to the economy. The Dec. 10-year note
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TYZ2 |
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30 year bond
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USZ2 |
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Intermune
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ITMN |
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mini slanted triple top at its recent high. ITMN is currently is carrying a
3-month
relative strength rank of 99 from TradingMarkets.com.
Harmony Gold
Mining
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20-day moving average. Today HGMCY is rallying from the 20-day moving average
with increasing volume. Harmony Gold Mining has a
TradingMarkets.com RS3 rating of 97.
Michael’s Stores
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MIK |
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rebounding of a 61.8% and a 38.2% retracement level. MIK is carrying a
3-month
relative strength rank of 95 from TradingMarkets.com.
Payless Shoe Source
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PSS |
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starting to move out of a pullback to the 20-day moving average. The stock
is holding a
3-month
relative strength rank of 93 from TradingMarkets.com.
Express Scripts
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ESRX |
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a pullback from its recent high. ESRX is carrying a
3-month
relative strength rank of 93 from TradingMarkets.com.
Micron
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MU |
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ROAD |
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will report earnings later tonight.