The Dow Wins
8th June 2008
Unfortunately, the DJIA won its battle with the NASDAQ, leading the markets down this week. It blew through prior lows like they were not even there on Friday. The only thing seemingly holding up the DOW was the low end of its Bollinger Bands, but on recent charts that has done nothing more than slow it down. While we might get a slight bounce on Monday because of this, I certainly would not count on this.
While the NDX chart doesn’t look as bad as the DJX or SPX, it certainly does not look like a safe haven. Keep your eyes on it though. Its recent strength point to the fact that Technology stocks are likely to lead the markets back, just do not hold your breath waiting for that to happen.
There were two major news items that led to the carnage on Friday, a 5.5% unemployment rate and $139 oil. People losing jobs, and higher inflation are certainly going to take their toll on consumer confidence.
As Bob would say, no reason to be a hero now. Use any bounces to lighten up on your long positions.
JD