Market Soapbox 04/07/05

Sorry about the delay in posting, but Blogger posting was down yesterday from 5PM till 2AM.
Close: SP500 1991, DJIA 10546, Nasdaq 2018, NDX 1499.
Resistance: SP500 1200, DJIA 10600, Nasdaq 2025, NDX 1510
Positive: biotech, semi, health care, drug, disk drive, airline, materials, software, hardware, consumer discretionary, telecom, homebuilding, industrials, utility, consumer staples.
Negative: energy, retail

Dollar: vs Yen: 108.6450 +0.0200; vs Euro: 1.2854 +-0.0003.
Bonds: 10-yr note -14 yielding +.058 4.48%;
Gold: XAU -.28%; $427.800 -0.600. CRB: 306.28 -1.79
Oil: XOI -.33%, Crude oil $54.11; -$1.74; -3.12%.
52 Week HiLo: DJIA 4 to 1, Nasdaq & Amex 1 to 1.
A/D Volume: DJIA 2.41 to 1, Nasdaq 3.67 to 1, Amex 2 to 1.
Volume: DJIA 1.86B, Nasdaq 1.67B

Oil fell and stocks rose for the 4th straight day. Less unemployment claims - 19K to 334K, less Feb wholesale inventory +0.6% down from Jan +1.1%, less wholesale sales -0.4%, and less consumer spending; Feb Consumer Credit +5.6B, down from Jan +11.5B and mixed retail same store sales.

Gartner groups report showed 2004 had a y-o-y 64% increase in chip equipment sales. This spurred semis +2%. Upon further review, equipment sales were spurred by 1st half production undercapacity and a reduction in chip form size (this requires new equipment regardless of chip sales).

2003 + 1st half 04 overproduction forced channel stuffing and caused a glut of semiconductors. As a result, 2nd half 04 sales of chip equipment slowed to a crawl. My head is shaking in disbelief. Alrighty then, the ducks have been fed, so get your shorts ready for later this month. I know the Boys from Bermuda are.

It seems the ISM leak on Friday did get the unwind out of the way. Today was the strongest day for the market this week. Other than low volume, the internals looked decent. The market did not leak into the close and there were no negative volume reversals. Right now, we are on the fence, a break past resistance with conviction could signal a nice uptrend.

Tommorrow the market operates in a vacumm, no economic reports. Quarterly reporting season awaits in earnest starting Mon April 18th. The market could head up for a few more days, at least until mid week. Short covering for Fridays options expiration should help. Max pain for index options is at QQQQ $37 - 37.50, DJIA (DIA)10700, SP500 (SPX) 1200. I expect the markets to gravite to these levels before Friday April 15th.