Bulls Vs. Bears
The Bears tried so hard to break the Bulls last week, hitting them with everything. The Bulls today said, I don’t think so, and stuffed it right back down the throat of the Bears, with the S&P 500 rising by 1 percent and the NASDAQ up over 1.3 percent. Over the past five days, the S&P 500 and NASDAQ are only down about 60 bps, and back within spitting distance of their all-time highs.
One Danger Lurking
The one danger we must all be aware of is that the equity market gapped higher at the open and was unable to push higher through out the day, suggesting the Bears are still alive out there, patiently waiting. Today’s move higher fills the gap created the morning of August 10. Tomorrow will be the critical day, if the Bears mount an attack they will target the lows seen on August 10, if they are unable to, the equity markets are likely to move higher in an attempt to take out the all-time highs.
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Technology and Biotech
Believe it or not, the technology sector as measured by the Technology Select Sector SPDR (XLK) is now actually at a higher level than it was on August 9 and is up nearly ten bps over the past five trading session. Biotech on the other hand as measured by the iShares NASDAQ Biotechnology ETF (IBB) is still struggling to regroup but is well off its lows.
The one other positive, for now, the Yen appears to have reversed its pattern of strengthening and has begun to weaken so far today. A sign that risk aversion is unwinding.
While the Japanese equity markets have opened the day modestly higher
We’ll keep watching….
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Michael Kramer and the clients of Mott Capital own shares of NFLX
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