FirstAlert(tm) Daily 8/26: Big Money Shows Patience

- Technical Commentary -

August 26, 2009 (FinancialWire) (By Dr. Joe Duarte) — The Nasdaq 100 Trust (Nasdaq: QQQQ) held above 40 on Monday and Tuesday, a sign of some patience from the big money that’s been flowing into the ETF. The question is whether investor patience will last as good market days fade into mediocre ones such as the action did on 8-24 and 8-25.

The stock market made a new high from the March bottom on 8-21. It was an options expiration day, which means that some of the action had to be unwound on Monday.

Thus, it was not surprising to see the market give up its early gains.  The action got soft on Tuesday as well, but the Qs managed to close with a small gain.  That’s also a positive.  What’s important is that there wasn’t a big selloff in the U.S. on either day, at least for now. Even more important is the fact that the QQQQ ETF, a leading indicator of this market’s health, due to the heavy money flows into several of its large tech stock components, held up.

To be sure, the rest of the market also held up. This is an even better indicator of where we are, and gives support to the notion that technology is once again leading the market, at least based on the most active stocks and the number of advancing versus declining stocks in that group.

So what’s next? As long as the Qs hold above 40, and the S&P 500 can stay above the 1011 area, the bulls get the benefit of the doubt. points could easily be taken out, leaving OIH room to move higher.

So far, the follow through to Friday’s rally has been tepid. The market can give any rally the benefit of the doubt for a few days. But, if we don’t get a bit more to the up side soon, we could start to see impatient investors return and then all bets could be off.

The FirstAlert(tm) Economics Calendar lists Durable Goods Orders for July (8:30 a.m.), New Home Sales for July (10 a.m.), EIA Petroleum Inventories (10:30 a.m.), Treasury auctions 5-year notes (1 p.m.).

The FirstAlert(tm) Events Calendar showcases ASML, ATHR, INTC, MU at Morgan Stanley Semiconductor & Semi Cap Equipment Access Day; CSCO Back to the Core of Business — Business Networks.

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. Of the Most Actives, last session’s trading showed 14 advancers versus 11 decliners. Volume leaders were led by Citigroup, Inc. (NYSE: C) trading 126,075,900 shares closing at $4.75 (down 1.5%), Fannie Mae (NYSE: FNM) trading 65,291,600 shares closing at $1.86 (up 9.4%) and the PowerShares QQQ Trust Series 1 (NASDAQ: QQQQ) trading 44,741,140shares closing at $103.16 (up 0.2%). Of last session’s Greatest Percentage Losers, stocks taking the greatest monetary losses were led by Barclays PLC (NYSE: BCS) trading on volume of 30,100 shares (losing $9,716.4 million), Gol Linhas Aereas Inteligentes SA (NYSE: GOL) trading on volume of 1,064,300 shares (losing $158.2 million) and AAR Corp. (NYSE: AIR) trading on volume of 308,500 shares (losing $67.7 million). Of last session’s Greatest Percentage Winners, stocks making the greatest monetary gains were led by Casual Male Retail Group, Inc. (NASDAQ: CMRG) trading on volume of 300,079 shares (gaining $31.3 million), Vestin Realty Mortgage I Inc. (NASDAQ: VRTA) trading on volume of 1,980 shares (gaining $26.5 million) and Nexstar Broadcasting Group Inc. (NASDAQ: NXST) trading on volume of 292,801 shares (gaining $19.9 million).

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

Quote of the Day: “It was not so very long ago that people thought that semiconductors were part-time orchestra leaders and microchips were very, very small snack foods.” Geraldine Ferraro

Today is: Women’s Equality Day (aka Susan B. Anthony Day).

Happy Birthday: Christopher Columbus, Robert Walpole, Mother Teresa, Albert Sabin, Irving R. Levine, Geraldine Ferraro, Don LaFontaine, Branford Marsalis, Macaulay Culkin.

Today in History: The ship Amistad was captured off Long Island in 1839. Mount Krakatoa erupted in 1883. The 19th amendment to United States Constitution took effect in 1920, giving women the right to vote. The first Major League Baseball game was telecast in 1939, a doubleheader between the Cincinnati Reds and the Brooklyn Dodgers at Ebbets Field, in Brooklyn, New York.

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