July 29, 2010

Market ranged within wide pivots on low volume.

Short-term: 4 yellow
Intermediate-term: 3 green, 1 yellow – tending green
Stock targets: 32% swimming, 34% neutral, 34% sinking

If this ain’t evidence of a tug-of-war, hard to imagine what would be. The bottom-up technical moves are now at nearly maximum strength. If bulls can’t get bottom-up fundamental buying and both bottom-up and top-down technical buying in now to plow through resistance; then they will soon run out of time. Everything is aligned for bulls – including a declining dollar and a good earnings season — except for a garbage economy.

This morning’s market action was interesting. Market opened up by almost exactly the same % that the dollar was down overnight. And until 11 am EST (when the European markets closed), the US and European markets traded in complete synch. I wonder if this is some coordinated attempt to goose the markets above resistance before August vacations.

If we do break resistance, I like stocks that are already buys (at least trading buys if not investments) that are higher beta and levered to growth — techs (UTEK, QCOM, ADTN), transport (ALEX, CNI, TAM), oil services (HAL, BHI, CRR), and momo (CRUS, VMW, LORL, BUCY, NTAP). But I really hope we go down and actually base. This phony trading market sucks.

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