Market Soapbox 07/12/06

Resistance: DJIA 11775; SP500 1335; Nasdaq 2380; NDX 1750
Support: DJIA 10650, SP500 1210, Nasdaq 2050; NDX 1500

May U.S. trade deficit widened slightly to $63.8B. EIA crude inventories -6M barrels, gasoline -400K, distillate +2.6M, crude prices jumped then stabilized.

YIELD CURVE INVERSION: Bonds UP with the 30 yr yield falling @ 5.13%; 10 yr @ 5.10; 5 yr @ 5.08; 2yr @ 5.17; 6 mo @ 5.29.

Recent Inversions: 2yr above 10 yr 12/27 - 03/07 & 03/20 - 3/29. 2yr above 30 yr 02/09 - 03/07 & 03/21 - 3/29. 6mo & 2yr above 30yr 06/13 - 06/30.

6mo above 10yr 06/02 -?; 2yr above 10yr 06/08 - ? 6mo above 30yr 06/13 - ?

MON, DJIA +13, a split tape day on lower volume with midlin internals.

TUE, DJIA +31 on higher but average volume with decent internals. Started down big then a 90 point reversal into the close.

WEN, no followthrough, a triple digit burial DJIA -122 on slightly lower volume with ugly internals. This week DJIA -78, since 09/19/05 DJIA +361.

Indexes UP: None DOWN: Everything crushed.

Sectors UP: Real Estate, Reits DOWN: Everything else slapped silly.

Overseas: CAC, DAX, Hang Seng UP & FTSE, Nikkei 225 DOWN.

Dollar UP vs. Euro 1.2758 & vs. Yen 114.40, XAU & gold DOWN @ 648.5, XOI DOWN & crude UP @ 75.23, CRB commodities index UP @ 352.62

Yesterday's late day tech (SOX +3.3%) driven bounce had no legs, today -2.7%. Tech getting crushed -9.9% YTD, Software -10.4% YTD. IBM at a 52 week low, Dell at a multi year low.

200 DMA: DJIA & NYSE sitting on, SP500, MID, RUT, TMWX & OEX slicing through. 600 DMA: NAZ sitting on, NDX & SOX falling from. It's still a big thumbs down as we see further downside to RUT 670.

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