GRANDPA JOE: But this roof is made of glass. It’ll shatter into a thousand pieces. We’ll be cut to ribbons!
WILLY WONKA: Probably.
Is today going to be the day? After pressing against our breakout levels all week, today do we should finally have the gas to get over the top or will our 5% levels keep acting like a solid barrier? We had an afternoon rally yesterday and the Dow rose 44 points for the day – right near our 10,700 line. The Nasdaq made our mark at 2,300 in a mini-stick into the close but the Russell continues to fall short of our Satanic target at 666 while the S&P is over it’s 50% line (discussed yesterday) at 1,121 but not over our 5% rule 1,155 so we’re still not impressed there and the NYSE also needs a pretty big move to get to our 7,350 target. We’ve been flirting with a breakout all week but what’s it going to take to punch it through?.
Willy Wonka had the physics right, there had to be enough power to get through that overhead resistance or it was going to be a very painful test of the top (like the one we had in April). Since our last dip, we’ve come back for another try but the volume has been substantially lower than it was in April, leading us to believe it is only TradeBots, and not Oompa Loompas, who are buying this market. Can TradeBots alone give us enough “thrust” to break through this time? It shouldn’t be THAT hard, in April we had highs of Dow 11,258 (5.6% higher than 10,680), S&P 1,219 (7.5% higher), Nas 2,535 (9.2%), NYSE 7,743 (7.2%) and Russell 745 (11.1%) so it’s not like we’re asking for a low with our little breakouts, are we?
SOX were 404, now 348 (13.8%), Transports were 2,279, now 2,254 (1%) and have been our leader so we’re watching them closely but what an odd discrepancy with the SOX, who have generally been reporting good earnings. Internationally, the Hang Seng is off 10.2% (from 24,000), 15.5% on the Shanghai (3,026), 16.8% on the Nikkei (11,408) but the BSE is UP 0.07% – leading all global markets at 18,172! Right behind India is Germany’s DAX, who just crossed positive this morning at 6,368 vs April’s high of 6,341. The FTSE is more in line with other indices, down 7.3% from 5,833 and the CAC is also down 7.1% from 4,086. As I mentioned yesterday, the Dollar…
