- Technical Market Commentary -

July 9, 2010 (FinancialWire) (By Frank Kollar) (Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.) — Both the S&P 500 Index (SPX) and its tracking ETF, the S&P Deposit Receipts (AMEX: SPY), remain well below critical levels even after this week’s two-day rally. Since the sharp rally on Wednesday, July 7, many analysts have noted that the head-and-shoulders pattern that has formed in the SPX and SPY charts has possibly been negated, as the neck of the right shoulder was surpassed. And that is the case, but the head-and-shoulders pattern, as old and venerated as it is in technical trading, is still only one indicator.

Decisions made on the actions of a single indicator are very risky.

Both the SPX and SPY are below their 50-day moving averages and 200-day moving averages. In addition, the 50-day average has now crossed below the 200-day average, which is bearish market action.

The rally this week could be the start of something, but it coincided with oversold lows, after two weeks of non-stop selling. It has the earmarks of short-covering.

Last week we wrote; “Anyone buying the S&P 500 Index since early February 1998 is underwater. That is twelve years after which the SPX is lower than when that hypothetical investor bought into the stock market.”

Between last week and this week, have any of the stock market’s concerns been solved?

Of course the stock market will do what it always does: its own thing. But we would be hesitant to jump into a rally of such short duration, with so many other bearish indicators intact.

(Go to http://www.financialwire.net/2010/04/22/about-kollar/ for more about Mr. Kollar, and go to http://www.financialwire.net/?s=kllrfby+cmmtry for more of Kollar’s commentaries.)

The FirstAlert(tm) “Money Index” is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ/AMEX 25 most actives and NYSE/NASDAQ/AMEX greatest percentage losers and percentage winners (weighted against pure monetary loss/gain) indicate the direction in which the mass of money is flowing, as well as the general focus of the market. Last session’s most actives showed 17 advancers versus 8 decliners. Volume Leaders were led by Citigroup, Inc. (NYSE: C) (streaming research for Citigroup available at http://investrend.stocksmart.com/ri/toc?tid=7921), the SPDRS S&P 500 Trust ETF (AMEX: SPY) (streaming research for SPY available at http://investrend.stocksmart.com/ri/toc?tid=34430), the PowerShares QQQ Trust ETF (NASDAQ: QQQQ) (streaming research for QQQQ available at http://investrend.stocksmart.com/ri/toc?tid=1044870), Bank of America Corp. (NYSE: BAC) (streaming research for BAC available at http://investrend.stocksmart.com/ri/toc?tid=1026233), Intel Corp. (NASDAQ: INTC) (streaming research for INTC available at http://investrend.stocksmart.com/ri/toc?tid=3619), General Electric Co. (NYSE: GE) (streaming research for GE available at http://investrend.stocksmart.com/ri/toc?tid=8030), the Financial Select Sector SPDRS ETF (AMEX: XLF) (streaming research for XLF available at http://investrend.stocksmart.com/ri/toc?tid=1026233) and Cisco Systems, Inc. (NASDAQ: CSCO) (streaming research for CSCO available at http://investrend.stocksmart.com/ri/toc?tid=1723).

The FirstAlert(tm) Economics Calendar lists Wholesale Trade for May (10 am ET).

The FirstAlert(tm) Earnings Calendar spotlights Atrium Ljungberg AB Q2 2010 Earnings; EMS-Chemie Holding AG Q2 2010 Earnings; Material Sciences Q1 2011 Earnings; Pacific Textiles Holdings Ltd Preliminary 2010 Earnings; Sun Hing Vision Group Holdings Ltd Preliminary 2010 Earnings; Treasure Factory Co Ltd Q1 2011 Earnings.

FirstAlert(tm) Website of the Day: http://www.theoildrum.com/

Quote of the Day: "I am not a product of privilege, I am a product of opportunity." –Sir Edward Heath (07/09/1919 – 07/17/2005), 47th British Prime Minister (47).

Word of the Day: sibylline \SIB-uh-leen\, adjective: 1. Prophetic; oracular. 2. Of, resembling, or characteristic of a sibyl; prophetic; oracular. 3. Mysterious; cryptic.

In context: “The response, by the bye, was of the true sibylline stamp– nonsensical in its first aspect, yet on closer study unfolding a variety of interpretations, one of which has certainly accorded with the event.” — Nathanial Hawthorne, The Blithedale Romance.

(Sibylline derives from the Greek Sibylla, any of several prophetesses consulted by ancient Greeks and Romans, of uncertain origin.)

Today is: Martyrdom of the Bab (Day)

Happy Birthday: 1925 – Charles E. Wicks, Professor, co-author of Fundamentals of Momentum, Heat, and Mass Transfer; 1932 – Donald Rumsfeld, 13th & 21st United States Secretary of Defense; 1945 – Dean R. Koontz, American author; 1959 – Clive Stafford Smith, British human-rights lawyer; 1970 – Masami Tsuda, Japanese manga author; 1979 – Suzanne Stokes, American model, (Playboy's  Playmate of the Month in February 2000); 1990 – Fábio Pereira da Silva and Rafael Pereira da Silva, Brazilian footballers.

Today in History: 455 – Roman  military commander Avitus is proclaimed Emperor of the Western Roman Empire; 1357 – Emperor Charles IV assists in laying the foundation stone of Charles Bridge in Prague; 1540 – King Henry VIII of England annuls his marriage to his fourth wife, Anne of Cleves; 1807 – The Treaties of Tilsit are signed by Napoleon I of France and Alexander I of Russia; 1868 – The 14th Amendment to the United States Constitution  is ratified guaranteeing African Americans full citizenship and all persons in the United States due process of law; 1900 – Queen  Victoria of the United Kingdom gives royal assent to an Act creating the Commonwealth of Australia thus uniting separate colonies on the continent under one federal government; 1922 – Johnny Weissmuller swims the 100 meters freestyle in 58.6 seconds breaking the world swimming record and the 'minute barrier'; 1962 – Andy Warhol's Campbell's Soup Cans exhibition opens at the Ferus Gallery in Los Angeles; 1991 – South Africa is readmitted into the Olympic movement after 30 years of exclusion.

FirstAlert(tm), published exclusively by FinancialWire(tm), was created by Gayle Essary, founder of Investrend Communications, Inc., parent of Investrend Information. The opinions expressed in FirstAlert(tm) do not necessarily reflect the opinions of Investrend or of FinancialWire(tm).

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Disclosure: Frank Kollar’s Fibtimer.com ETF Timing Strategy has a position in the S&P 500 SPDRS.

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