Katrina
The Dow closed down 162 points while the Nasdaq NDX fell 15 points. 6 sectors were up and 28 were down. Action for the week was minus 463. A little less negative than the previous week which led to weakness.
Our market indicators are now getting oversold with intermediate oscillators neutral and trends flat with a downward tilt. It will be interesting to see how the market weathers the storm this coming week. Gas prices could spike even more taking a bite out of back to school sales and other retail venues. When the gas pump takes an extra $20 out of your pocket we all have less to spend on dinner and a movie.
So far the Broker Dealer XBD index has managed to stay in the top ten ranking so the brokers are not predicting any great calamity in the near future. Additionally tech sectors like Disk Drive DDX and Semiconductor SOX continue to find support even on down days.
Rydex funds- Long the NDX.
Short term - Oversold
INTERMEDIATE TERM TRENDS
NDX, DJIA, SPX -- Flat to down
INTERMEDIATE OSCILLATOR
Neutral
Cable and Media SCQ- Despite pirating concerns this sector is still on top with MGM and Spanish radio station owner Emmis EMMS still the leaders.
Oil patch XOI,OSX, XNG - The Oil patch rallied back into the top ten ranking in
anticipation of Hurricane Katrina’s land fall. We are glad we own XTO Energy XTO but
would not chase any of the other stocks here. Smaller producers may actually be hurt as production is curbed.
Broker Dealer XBD- Not ready to give up the ghost yet and still optimistically in the top ten ranking. Lehman LEH and Ameritrade AMTD are the strongest stocks in this sector.
Semiconductors SOX- Managed to rally into the top ten ranking last week despite a
sagging market. There has been some noticeable buying in this sector over the last few weeks even in a very slow trading environment. We are looking for a Labor Day rally in this sector led by Texas Instruments TXN, Natl. Semiconductor NSM, Broadcom BRCM and Novellus NVLS.
Banking BKX- Bank stocks are last in overall rank but many like Bank America BAC and BBT have high dividends and low stock prices. Given our outlook for steady interest rates this sector is worth looking at now.
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This report is for educational purposes only and do not constitute "investment advice".
