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Millionaire Now! by Larry Nusbaum

This blog is based on the organizational principles found in my new book, "Millionaire Now! - A Financial Toolbox with Seven Steps to Wealth".

Today's Open: Down

Posted on 07/22/2008 10:12:07 | Link | Post Comment

Lack of Buying Demand as Major Averages Fail To Make Headway
PICTURED BELOW: The S&P 500 index broke above its downward trendline on Friday and just completed Day 4 of its new rally attempt. The major averages spent yesterday in a relatively tight trading range and ended lower as traders digested the latest round of earnings and economic data. The Nasdaq Composite completed Day 5 of its nascent rally attempt which means the window for a proper follow-through day to emerge remains open. Meanwhile, the other major averages marked Day 4 of a new rally attempt, which means that a proper follow-through day could now occur in any major average as long as the recent lows are not breached.

Short term the markets are somewhat over bought with RSI (2) levels at/near the 80 level on most major indexes- and with the VIX taking the recent hit - more reason why the markets may find turnaround today- lower as the next big bank - WB reports- lower quality and more risk. And have the financials bottomed? My guess is the real question is whether real estate has bottomed- if R/E drops another 10/15% won't most of the banks/financials be insolvent due to leverage.

"S&P 500 futures dropped 11 points to 1,250.60 and Nasdaq 100 futures fell 33.75 points to 1,793.75. Dow industrial futures fell 106 points as weak outlooks from a raft of companies, including Apple Inc., American Express, Texas Instruments and Vodafone Group, sent stock futures lower Tuesday morning, with tech stocks in particular seen getting battered."

Financial shares put up a mixed performance on Monday as the Broker/Dealer Index ($XBD -2.10%) fell while the Bank Index ($BKX +0.72%) posted a modest gain. The tech sector also showed mixed results as the Biotechnology ($BTK +2.24%) has recently rallied back above its 50-day and 200-day moving average (DMA) lines and cleared its April-June chart highs, and Networking ($NWX +1.23%) index posted solid gains but the Semiconductor ($SOX -1.10%) and Internet ($DOT -0.86%) indexes were clear laggards. Commodity linked areas were on the rise as the Gold & Silver ($XAU +1.29%), Integrated Oil ($XOI +1.96%), and Oil Services ($OSX +2.37%) indexes advanced. Weakness in the Retail Index ($RLX -1.55%) and the Healthcare ($HMO -1.18%) group also weighed on the major averages and kept them from making any progress.

LINKS:

From 24/7 WallSt.:
Media Digest 7/22/2008 Reuters, WSJ, NYTimes, FT, Barron's
Top 10 Pre-Market Analyst Calls
Asia Markets 7/22/2008 (CHU, CN)

7 Stocks You Need to Know for Tuesday
Tuesday's list includes: Waqchovia and BofA.

Wall Street Breakfast in Seeking Alpha by SA Editors on July 22nd
What you need to know in early trading today.

The Trend Trader for Tuesday July 22nd from BarChart.com

Stocks in focus on Tuesday from MarketWatch

TradingMarkets Monday Stock Movers: BRLI, CUB, PNFP, VAL, GET

September silver was higher overnight due to short covering as it consolidates some of last week's decline. Stochastics and the RSI remain bearish signaling that sideways to lower prices is possible near-term. Closes below the 20-day moving average crossing at 18.230 are needed to confirm that a short-term top has been posted. If September renews this month's rally, the 75% retracement level of the March-May decline crossing at 20.040 is the next upside target. First resistance is the overnight high crossing at 18.730. Second resistance is the 50% retracement level of the March- May decline crossing at 18.760. First support is the 20-day moving average crossing at 18.155. Second support is the reaction low crossing at 17.550.

Prices of Treasury coupon securities have jumped in overnight trading as economic news from around the globe frames a picture of a global economy traipsing through a very rough patch.

Solutions to Achieving Outperformance in a Low Return World