The Dow is up 0.08% at 11396, the S&P is up 0.2% to 1270, and the Nasdaq is down 0.09% to 2364. Leading sectors include: Thrifts and Mortgages +4.0%, Oil and Gas Exploration +3.6%, Gas Utilities +3.1%, Apparel and Accessories +3.0%, and Oil and Gas Storage and Transportation +2.1%. Lagging sectors include Consumer Electronics -2.7%, Trucking -2.2%, Specialized Finance -2.0%, Electronic Computers and Equipment -2.0%, and Auto Manu -1.5%. The morning action came from lower than avg volume (NYSE 351, vs. 496 avg, Nasdaq 689, vs. 856 avg), advancers outpacing decliners (NYSE 1943/1317, NASDAQ 1502/1141, and with new lows outpacing new highs (NYSE 11/93, Nasdaq 33/71).
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The Dow was down 2.08% at 11386, the Nasdaq was down 2.03% at 2366, and the S&P was down 1.96% to close at 1267. Leading sectors included Home Furnishings +2.0%, Airport Services n/a%, Alternative Carriers n/a%; Catalog n/a%; Commodity Chemicals n/a%. Lagging sectors included Trucking -6.4%; Real Estate Mgmt -6.3%, Casinos and Gaming -5.6%, Industrial REITS -5.2%, Construction Materials -4.9%. Today's movement came from lower than avg volume (NYSE 865 vs. 1332 avg, Nasdaq 1455, vs. 2158 avg), with decliners outpacing advancers (NYSE advance/decline 767/2629, Nasdaq 627/2230) with new lows outpacing new highs (NYSE new high/new low 12/102, Nasdaq 41/109.
TECHNICAL. Intraday it was low to high, turning back to a more bullish picture as it should. Typically the intraday action reflects the action of the day, i.e. low to high on the upside sessions. You have to look at the transition days, those days where there was no definitely clear winner for the day. On this week the transition days showed some backbone.
INTERNALS. Solid 2.5:1 breadth on both NASDAQ and NYSE. Volume was nonexistent and you can thus downgrade the session based on that, but that is how it goes at the end of summer. There is very little trade right now and what trade there is at least shows higher trade on up sessions. Not much accumulation but some accumulation, and that keeps the rally going near. Longer term this volume no doubt that leaves the rally over the past three weeks subject to getting sold off as more money managers get involved, especially as the rally moves toward September, historically the worst month of the year for stocks. That remains to be seen. For now stocks are moving even if it is on light volume.
CHARTS. S&P 600 held the 200 day SMA while NASDAQ and NASDAQ 100 held the 50 day EMA and all bounced nicely. That was the key for the week, and while volume was boringly low, they held where they had to and then bounced. That sets up the move back to test those June and July highs.
LEADERSHIP. Rails are rebounding as transports are still in the leadership mix. Rails are helped by high fuel costs given they are cheaper for freight, but truckers are not in the doghouse themselves. Retail continues to improve with more and more basing up and moving higher. Economically sensitive stocks doing well, and that is the hallmark of this move. Medical and healthcare remains solid. Financials are trying to base in this up and down market action, putting in the necessary work to put in a bottom for longer term. It is still tenuous, but stocks are putting in the work to form bases.
SUMMARY. The prior week we talked of the need for SP600 and NASDAQ to test further and this past week they did just that. They went a bit deeper than the 18 day EMA, but they held key support, held tight for a couple of days in a tremendous amount of gloom, then started to bounce Friday. Sure the indices finished lower for the week, but they have done what they needed to do if they are going to make another move: consolidated the last rally, held support, and put leadership in position to bounce again to take on the prior highs and key resistance. That is about all you can ask.