Relief Rally Around The Corner?

• July 15, 2004
• Tim Truebenbach

The market is beginning to look
so weak that I am beginning to think a relief rally may be around the corner. 
The S&P 500 is bumping against its 200-day moving average as well.

 

 

We have seen blatant
distribution on the NASDAQ on 7/14 and 7/6 with other minor bouts as well.  It
does appear as though the line of least resistance is lower.  The Semis are the
weakest group and this is not a good thing considering they have been leading
the market for the past year or so.

^next^

 

Growth stocks have felt the
weight of the market and can be seen through names such as Deckers Outdoor
(DECK).  The stock was setting up to break out through 30.60 as the market
really began to decline.

 

 

As I mentioned before, no
matter how strong a stock seems, it will almost always succumb to the market’s
pressure.  Research in Motion (RIMM) has been that name and may go even
lower.

 

 

After the recent decline we
have seen, shorting stocks down here may not be the best idea.  If the market
does bounce on lighter volume at all, that may be the place to lay out some
shorts in ETF’s that appear weak.

 

Enjoy the downtime and have a
great weekend!

 

Tim Truebenbach