Yesterday, the averages chopped around in narrow ranges and closed out the mixed session with minor gains and losses. The only point of interest was that the Health-Care and Biotech sectors, continued to roll higher for the 4th day in a row, which just happened to coincide with the unveiling of the Senate’s Health Care Bill that goes “soft” on Drug Pricing. Now, I’m sure that it was just a happy coincidence, that these sectors shot up 10%, in front of the Senate’s Bill, that does little to control Drug Pricing, but one would have thought that after all the bashing of Drug companies since the election, they would have done something, oh well, that’s Washington.
Technically, the recent sideways trading action, now has all the Indexes out of overbought territory, but they are nowhere near being oversold and the only Indexes, forming bottoming patterns are the Russell 2000 and Transportation Indexes, which means that we may see them turn up and make runs at their highs of 1425 and 9600, while the rest of the market continue to chop around.
Overnight, the Global markets were quietly mixed and in early trading the DOW is down slightly, the Yield on the 10 Yr is flat at 2.16%, the Dollar is down and Commodities are higher, with Copper the star trading up to $2.65. Oil which is holding just above Major Support at $42, is oversold and could trade up to $46 on any rebound, but unless the Demand for Oil increases, or the Supply decreases, Oil may stay between $40-$46 for awhile.
Today all we have on tap are the May New Home Sales out at 10:00, but with the Fed on automatic as far as “normalizing rates”, the data doesn’t mean too much anymore. Judging by the lack of volume it looks like the Markets Summer Doldrums have begun, so take profits when you can and only start new positions at the right price.
Today’s Early Markets
DOW Futures— down 10.00 London – down 13.58
S&P – down 300 DAX – down 34.56
GOLD—$1257 August Nikkei — up 22.84
OIL— $42.90 August HangSeng — down 4.78
DOW RESISTANCE 21,520 S&P RESISTANCE 2440
DOW SUPPORT: 21,320 S&P SUPPORT: 2430/2425
$NASDAQ RESISTANCE 6250
$NASDAQ SUPPORT 6200