Monday, August 4, 2008
Equities reversed a downtrend on weakening energy. As a consequence, the consumer complex is showing relative strength. (I'll post a pairs trade article on that later in the week after the newsletter is out.) Adjusted Tick remains quite negative; however, so be careful. I'd put technical support for the SPY at the convergence of the daily S2 and the rising trend-channel value, $124.50. Don't mean to imply that I'll think we'll hit that level at this point. A more intermediate level on the downside would be between the morning lows and S1 (dotted blue line).