Sector Investing

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Some market chart musings; Looks like the DJIA has put in another local top based on the charts today. That would seemingly be confirmed by the low TRIN score yesterday as well.

The NAZ and basically all technology related indices are attempting to move higher but most were stymied today by their 20 day sma's.

I believe it will be possible for the NAZ et al to head higher the next couple of sessions in advance of DELL's report but the declining volume on both exchanges may be spelling out impending doom for any continuation of this rally in the intermediate term. Technology needs the SOX to continue on to a new breakout high for this rally to continue. This is not likely due to declining volume and the likely lack up upward bias to the DJIA. This is a divergence. It is also not likely in the absence of a lot of good news. We are almost done with earnings season. DELL could have a very large impact. And maybe not. Friday, options expire so it could be a big trading day. I suppose even a consolidation at these levels would be a victory for the longs. I just would not get too complacent. Stocks can fall a lot faster than they rise. We are coming to that time of year when bottoms are made.

Right now Natural Gas, Oil and Oil Services look like they will have a tough time going much higher from here to me. Even gold looks top heavy as I mentioned on Monday.

Once again keep in mind that it is customary for the market to set lows in the September to October time frame. Despite a lot of upbeat economic news and a majority of earnings reports that beat estimates this quarter there may be ample opportunity for the market to roll over in the next couple of months.

This could be a very good time to be careful with any new long investment dollars. If money does rotate out of the market into bonds then that means a sell off. It does not have to be too deep a sell off to hurt those who buy stocks at the top of a rally.

JMHO which may not be based on anything remotely approaching future reality. I am out of my AMAT long position and looking to short more perhaps in the high 19's.

RtS