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July 6, 2005

Break It Down

Yesterday’s “break-out” move was not confirmed today. The S&P500 reversed rather convincingly, and an attempt to rally the Nasdaq failed. Intel, which was up nearly 1.5% mid-day, closed on the dark side. Yahoo set a new low for its month-long slide. Research in Motion tried to hold gains until early afternoon, then slid quickly to a final loss of nearly 2%. Even housing stocks made an attempt at a new breakout today, then failed and went dark. Technically, the homeys are looking very weak, and it’s looking more like their 6-week monster rally from mid-May may have been a blow-off phase of their mania, as I theorized on their big reversal day two Fridays ago.

So with $60 oil looming overhead, and earnings season sneaking up, the bulls have a big trial upon them. I would be very surprised to see them come through. Hopefully not too many people share my sentiment or we may all very well be dismally surprised.

Disclosure: Short YHOO, INTC, RIMM. Long INTC, YHOO Puts

 

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