Trades and Follow-up Commentary for July 11, 2006
Issue No. 61
Last Updated: 07-11-06 9:00 PST
Options Strategist and Editor: Dennis V. Leontyev, President & Chief Investment Officer,
Milangy Management Compay, LLC
To all HOTS Subscribers:
The latest pull back (last 5 days) in the market has been accompanied by low volume and decreasing open interest in index futures. Most indexes held well with exception of NASDAQ, which was taken down by the semiconductor stocks. With today’s reversal in tech shares I see diminishing risk over the next few days and maybe weeks. NDX has retested June lows on lower volume; semiconductors are extremely oversold; sentiment is very bearish; no major price damage has been done to the S&P. SPX has retested 1260 support and managed to reverse from this level. Overall the market looks constructive near term. Although it is difficult to imagine major indexes going to new highs from here, indicators suggest that being long the market is less risky right now.
S&P 500 daily:
As long as SPX is above 1260, long positions are justified.
QQQQ daily:
QQQQ chart illustrates RSI divergence as well as higher volume on up days vs. down days.
Dennis Leontyev
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