What a day.
It started off well enough, with the GLOBEX in the tank and an instant 50 point chop off the Dow. From that point until almost the end of the day, the losses got chipped away, and eventually the bulls took the upper hand and pushed the Dow up about 70 points. By the closing bell, the Dow closed up about 42. So they took another one away from us.
It seems the increasingly active 'comments' section of this blog has become a commiseration center for us bears. I can sympathize! It's frustrating and maddening to witness this market's continued strength. There are pockets of weakness - such as good old HANS finally getting kicked around some - but, by and large, the bulls are still running the show. (I don't get real hung up on conspiracy theories about the Trilateral Commission manipulating prices..........the fact is that virtually all investors out there are, by their nature, bullish, and that have a lot of money to push this market higher).
I've been very focused on the Dow, which has been relatively strong compared to the Nasdaq and S&P, and - unfortunately - it finally crossed above the "line in the sand". It doesn't mean the bear case is vanquished. It does mean, in the short term, that it holds less water. It would actually make a lot of sense if we had a big rally tomorrow, from a technical perspective. A crossover is a crossover, and there's no doubt prices violated this resistance line.
Looking at the minute-by-minute chart, you can see some very plain, broad Up and Down trends. The time is right for it to turn back down. But nowhere is it written that this up and down cycle will continue. The market should have started going down today (and, at first, it did), but the bulls overcame that weakness.
What never ceases to amaze me - and I mean this, because I've been doing trendlines forever - is how much power trendlines have. I mean, Good God, just look at it - once the price crossed above the trendline, it "obeyed" it beautifully, coming to a gentle rest at exactly the trendline. This will be the launching off point starting tomorrow morning after the jobs report (either up, which is sadly more likely, or down).
I humbly offer a few short suggestions for your consideration. Here's Motorola:
Transocean (RIG), suggested earlier in this blog, which showed some nice weakness today:
And aging handsome dude Ralph Lauren:
Two big events are coming in the next three trading days: the jobs report (Friday, tomorrow) and the Fed (Tuesday). This is really our last, best hope to get the downward market we "should" get based on the market's behavior the past couple of months. If this strength continues, we're really going to have to re-evaluate.
Thursday, August 03, 2006
What a day.