Deorbit and Landing
The Dow closed down 82 points while the Nasdaq NDX slipped 3 points. 8 sectors were up and 26 were down. Action for the week was minus 1583 as the bulls lost traction. The large negative action will be difficult to turn around for the Bulls in the low volume month of August.
Trends are slightly positive but flat is a more accurate description. Interest Rates TYX, specifically the thirty year interest rates are at the top of the broad based ranking and Commodities are next both of which are outperforming stocks. Volatility VIX is still on the bottom so we have not seen a shake-out yet.
There is no new leadership to take the stock market to relative highs at this point therefore treading water is a good alternative. Taking profits on stocks that have recently run up is also very prudent. Our stock portfolios (listed on page three) have done well with booked profits far outweighing current positions.
Rydex funds- Cash. Until a trend develops or we get stretched high or low.
Short term - Neutral
INTERMEDIATE TERM TRENDS
NDX, DJIA, SPX -- Flat to Up
INTERMEDIATE OSCILLATOR
Overbought Sell July 13th
Summer doldrums (and the heat wave)
are solidly in place.
China CZH- The leading sector with Baidu.com BIDU making headlines on the ticker
tape Friday. Many of the China stocks are near new highs including CNOOC CEO,
Netese NTES and China Life LFC.
Oil patch XOI,OSX, XNG - The Oil patch started up again last week and will not go away with oil at $63 bbl. Talk of $75 to $100 oil will have economists and consumers checking their calculators and wallets.
Transportation IYT- The obvious loser as oil rallies. Is the economy growing fast enough to outpace oil price increases? Transportation tells the tale and last week the answer was no.
Gold XAU - Made a run to the top rankings last week with a break out look to it. Currency concerns and changing of the guard in Saudi Arabia appear to be the reason versus inflation but a continued rally in Gold will have the inflation fighters a-buzz.
Retail IRH- Also took a hit with the higher oil prices and just plain profit taking as many of these stocks made big moves in July.
Housing HGX- Fell off the porch last week as it is clear prices are softening and
inventories are building in previously ‘hot’ markets like Washington DC.
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