Monday, July 26, 2004

Today so far has followed closely what we noted on Friday regarding gap up opens after large summer Friday selloffs.  If it continues to follow precedent, we should have a down close today. However, we are finally beginning to see some signs that things are becoming washed out.  The TICK on the NYSE hit -1000 about 1/2 hour ago - the last time we saw that was on June 14th which coincided with a short-term low as we rallied for about the next week.  It can get quite a bit lower, such as -1200 or more, but even -1000 is unusual. Also, we've had 6 weeks in a row now where the S&P has closed lower.  In its history, it has only gone 7 weeks three times, and 8 weeks once.  It normally rebounds after 6 weeks, though this kind of downward momentum more often than not continued after 4 weeks or so (suggesting we most often saw a shor-term rebound before the downtrend resumed to some extent).  This time could obviously be different, but just looking at how the S&P has performed in the past, another down week would be a stretch. We could finally get a decent opportunity from the long side, for short-term traders anyway, if we continue to decline today.  We'd have to see how our measures look, but we could be setting up for a "turaround Tuesday". 11:50:10 AM