8/4 - Market Commentary

Today was a good day, however, we are still not seeing the kind of strong volume that will be required to break through the formidable resistance that lies above from the down-sloping 50-Day MA’s near 11,750 on the DOW, 1,305 on the S&P and 2,360 on the NAZ.

Also, only the NAZ has cleared the first of 3 major resistance levels (200-Week) on the longer term weekly trends.  Both the DOW and S&P have yet to challenge this first hurdle in these longer term resistance trends. 

It appears that there is significant resistance on the DOW from ~11,750 up to ~12,650+, which would clear all of the Daily and Weekly downward trends lying above current levels.

Most traders are still cautioning against getting long here and are staying with the recent mantra of selling these ST rallies.  The current volume trends would tend to support this sentiment, and with August being an historically bad month we feel that the best strategy may be to continue to sell premium into these rallies on LT Long positions and selectively enter a few shorts that may be confirming new downtrends.

Most of the strong commodity plays certainly appear to be in the process of rolling over and possibly confirming these rollovers.

Coach BD