Key Levels

The NQ100 through yesterday had become a bit timid with the DELL announcement after the close adding to weakness. There is no price bottom without the NQ100 leading and holding key levels as the market tries to move away from lower consolidation. Last Friday's highs represents a key level to maintain. For the three animals we watch, the DJIA, SP500 spot and NQ100 spot, those prices would be ; 11632, 1294, and 1941.

Rally Needs

Indexes a bit higher this am trying to build on yesterday's close and the GDP number. The DJIA, SP500, and NQ100 all need to climb above last Friday's high and hold to have any chance of moving into the next leg up.

Big Price Week

Once again, important week for price action which will establish whether or not we rally until the end of year or break through the election and beyond. This weeks lows or ever so slightly lower lows next week will be the benchmark for buy/sell.

Base Building

After yesterday's sell-off, indexes trying to find some footing. This range bound action finds the indexes about in the middle of the overall range with increasingly bearish media coverage about banks and brokerage. Base building this week has to develop into the next step up or a softer September will lead to a potentially lethal October.

Trading Paces

These markets are scrambling to attain clear site lines over the wreckage of a disastrous eight year period where nearly every sector of the economy has been damaged. As Republicans beg for another chance to repair the economic events unraveling under their watch, Democrats believe they can do better with a candidate Wall Street desperately fears. Predicting how things work out in both the political arena and in fixing the economic plumbing of the country is helping to drive the current trading values. The trading pace will quicken as fall trading begins with hopes of a clearer picture emerging as to the effects of financial interventions already implemented.

Confirm A Bottom

Early action this morning showing strength in the stock indexes but still remain well of this week's high. We are entering a critical time period for establishing a base for the final three months of the year with closes needed over 11800, 1322, and 1933 in the DJIA, SP500, and NQ100 respectively to confirm a bottom.

The Three Indexes

DJIA is the weakest link right now as the indexes try to fight off the most recent declines. The SP500 follows in the number two spot on strength with the NQ100 continuing to lead the three with the first level of key support down at the 1853 mark basis the spot futures. Taking a cue from NQ strength can be a nervous venture since solid gains can disappear quickly.

Cloudy

News is slapping the futures down as the view ahead is clouded with inflation and bank worries. Technical internals are not bad but the indexes will need an upside reversal to get shake off the pessimism over price potential. Bears need a headline to drive the market lower.

Indexes Will Tip Their Hand

Starting new week with little market energy as mid of August has turned into the quietest action since the beginning of the year. Bulls will try to extend gains again this week but are starting to run into some doubters as to the legs of the current rally. Commodity prices and their correction have had little to do with this rally despite what the market morons think. Stock indexes will tip their hand when next week they create a range which will be the bull/bear dividing line for the rest of the year.

Worth Less

As mentioned in a previous blog, commodity prices declining is a positive as long as it does not couple with the notion of all things being worth less. Commodities are currently in the 50% retracement flight path and will settle into a trading range that will last a significant period of time, especially after the absurd levels they attained on the upside. So it is hard for indexes to get comfortable at higher levels simply because hard assets are correcting. The best cure for the bull is higher prices and we have yet to reach levels to confirm the bottom.