Securities Research Services

Wednesday, July 11, 2007

Short Term Trend Turns Down

The market showed its hand yesterday and indeed, it would have paid to short a dull market this time through. The S&P led the way lower, though put sellers are still in the overly bearish category (perhaps this means the sell off won't gain traction?). The tech sector showed good relative strength against the broader market. If this continues, we should get an excellent buying opportunity in tech in the next few days.

For now though, the market is in a near term downtrend, so it is important to lock in the gains and tighten up stops. The target for the S&P and Dow is now June lows. The NASDAQ, measured by the QQQQ, has support at $48, which may or may not hold, and support at $47, which is quite likely to hold.

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