Summer Doldrums
The Dow gained 20 points while the Nasdaq NDX slipped 6 points . Action for the week
was plus 3 or flat. 16 sectors were up and 16 sectors were down.
With the FOMC meeting on Tuesday investors are on the sidelines. If they do not raise
rates the inflation talk is likely to be strong. Our view is they have already gone too far.
The long end of bond market is anticipating an economic slow down and the possibility of
a recession. A better boost would be a drop in the price of oil. You feel mugged when you
fill up an SUV at $3 plus a gallon.
Rydex funds- In the Bearish (Inverse)
Russell and Dow funds
Short term - Overbought
INTERMEDIATE TERM TRENDS
SPX- Up, Dow- Up SML & NDX - Down
INTERMEDIATE OSCILLATOR - Neutral
Oversold Buy June 13th Successful retest July 17th
Dividend Yield DVY- Number one in overall rank which is reflected in our holdings. We
have a big allocation in stocks that pay healthy dividends whether they be Banks, Tobacco
or Utilities. We also recommended MeadWestVaCo MWV last week. This illustrates the
defensive mood of the stock market.
Oil Patch XOI, XNG, OSX- Peaked last week as we thought it might despite the price of
oil hovering around $75.
Broker Dealer XBD- Moving up nicely in relative rank which is an optimistic vote for the
stock market. Bear Stearns BSC, AG Edwards AGE and our Raymond James RJF
holding led last week.
REIT’s NLR- Many of the REIT’s are hitting relative highs with good dividends and lease
rates.
Insurance KIX- Fell off dramatically with poor reports from Prudential PRU and others.
This sector is falling apart at the seems unlike Banks and Brokerage which are finding
some buying.
Retail IRH- It is back to school time and the Malls are full of shoppers. If this sector can do
well we may avoid a recession.
SUBSCRIPTION INFO
A sample copy of the entire SectorVue newsletter via email may be obtained emailing sectorvue@cox.net .
Requests for a sample fax must include full name and voice phone number. Subscriptions are $500 per
quarter for individuals $1000 per quarter for offices. Rydex alerts priced separately.
This report is for educational purposes only and do not constitute "investment advice".
