The Market Direction…

>>>Market Condition Analysis>>> As expected, Goldman Sachs (GS) knocked the ball out of the park in terms of topping consensus estimates for earnings. While the news was welcomed, financials (XLF) went from being yesterday’s leading sector to today’s weakest laggard.

Johnson & Johnson (JNJ), another bellweather, also topped expectations with better than expected earnings. However, the healthcare sector (XLV) was only modestly up as it faces the headwinds of a healthcare bill in the House proposed by Democrats that would allow public health plan options to compete against private insurers.

Economic data was relatively mixed. PPI and Core PPI both increased more than expected while Retail Sales (inclusive of autos) rose more than expected.

Volume was down on both of the two major exchanges: NYSE volume -18.39% below average and Nasdaq Composite volume -12.41% below average.

On the surface, Tuesday’s performance might appear solid as the major indices closed near the upper ends of their narrow trading ranges. However, price volume analysis revealed signs of @ 41% distribution selling patterns (price up & volume down) for stocks. The implications are bearish and at the very least should be heeded as a sign of caution.

Earnings and guidance will be the ultimate drivers of investor sentiment, but this is something that will unfold with the passage of time.

Industry Summary–> Positive: 178; Negative: 31; Unchanged: 0

Leading Industries: jewelry stores; dairy products; textile manufacturing; recreational goods; sporting goods; resorts & casinos; railroads; reit-hotel/motel; broadcasting-tv; printed circuit boards

Lagging Industries: personal computers; internet service providers; health care providers; surety & title insurance; regional northeast banks; regional airlines; medical practitioners; savings & loans; regional mid-atlantic banks; regional southeast banks

Volume Movers

Stocks Moving Up on Surging Volume

• Large Caps: CIT; HAR; TIF
  

• Mid Caps: FCS; UNT; KMX; AM; EXH; ADTN
  

• Small Caps: NOVN; AVD; POOL; LZB; DCOM; CTR
  

Stocks Moving Down on Surging Volume

• Large Caps: AIG; DELL; HUM
  

• Mid Caps: HNT; MLM
  

• Small Caps: CPF; TTWO; CHP; SYNA; ODFL; NWK
  

Market Summary

The DIA closed up +0.42% @ $83.66 and $0.05 below its high and $0.73 above its low. Volume  was -27.52% below average volume. Daily PMI* is @ 93.59 and weekly PMI* is @ 98.18.

The SPY closed up +0.57% @ 90.61 and $0.08 below its high and $0.88 above its low. Volume was -12.95% below average volume. Daily PMI* is @ 91.67 and weekly PMI* is @ 97.83.

The QQQQ closed up +0.37% @ 35.72 and $0.07 below its high and $0.32 above its low. Volume was -0.88% below average volume. Daily PMI* is @ 82.05 and weekly PMI* is @ 95.30.

The IWM closed up +0.59% @ 49.55 and $0.17 below its high and $0.60 above its low. Volume was -31.75% below average volume. Daily PMI* is @ 77.92 and weekly PMI* is @ 93.06.

(*PMI measures and indicates strength of the underylying security’s trading range on a scale of 1-100.)

Market Condition and Trend Analysis

Momentum Analysis (Percent of Stocks Above Moving Averages)

Technical Support & Resistance Levels for July-15-2009

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