Market Soapbox 08/21/06

Resistance: DJIA 11775; SP500 1335; Nasdaq 2380; NDX 1750
Support: DJIA 10650, SP500 1220, Nasdaq 2000; NDX 1450

YIELD CURVE INVERSION: Bonds UP with the 30 yr yield falling @ 4.96%; 10 yr @ 4.81; 5 yr @ 4.76; 2yr @ 4.86; 6 mo @ 5.17.

Recent Inversions: 2yr above 10 yr 12/27 - 03/07; 03/20 - 3/29; 06/08 - 07/26. 2yr above 30 yr 02/09 - 03/07 & 03/21 - 3/29; 6mo & 2yr above 30yr 06/13 - 07/20.

2yr above 10yr 08/03 - ?; 6mo above 10yr 06/02 -?; 6mo above 30yr 06/13 - ?

MON, post short covering letdown and defensive plays ended the longest win streak in 5 months, DJIA -36 on low volume with ugly internals. This week DJIA -36, since 09/19/05 DJIA +684.

Indexes UP: DJUA, XOI, XAU, AMEX DOWN: DJTA -1.9%, NDX, MID, SOXX -1.9%, RUT

Sectors UP: Energy, Commodity, Gold Bugs +5.5%, Healthcare, Utilities. DOWN: Transports, Brokers, Tech, Semis, Cyclical, Biotech.

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

Dollar DOWN vs. Euro 1.2927 & FLAT vs. Yen 115.34, XAU +4.6% & gold UP +2% @ 635.2, XOI +1% & crude UP +1.6% @ $73.3, CRB commodities index UP 1% @ 335.5.

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