Dow Flying Alone

The stock market gets ready to open for another week of trading.  Last Friday, the jobs report seemed to bolster the market a bit with the Dow jumping about a hundred points.  We have said for the last several weeks, most of the year in fact, that the Dow has remained strong while the broader market has not been a part of that move. The closest major index to the Dow is the Russell 2000 which fell from its new highs about a week ago and now has to move quite a bit to catch up to the Dow.  Again, that’s not to say that it won’t catch up, just that it hasn’t so far.  

I think more important to the Wednesday Update is the SOX, the Philadelphia Semi-Conductor Index.  The SOX has fallen in the same time frame as the RUT (Russell 2000) and had kept falling.  Even with Friday’s 100+ point move in the Dow, the SOX was down.  This is a particularly glaring signal that we are paying close attention to.  Our favorite little stock, INTC, has dropped below 20 and the stock is now pushing on support from about two years ago right at this level.  Further selling should be imminent.

We are avoiding the news in our recent posts because the news is what it is but the market is doing what it does best, confuse the most participants it can.  We think that the news serves to confuse even more so we want to pay attention to the market.  Right now and for the past several weeks the Dow has been showing some strength while the broader averages have not followed suit.  This is classic early stages of a downturn.

Be careful out there…

Dow Industrials:  11,076.34  +104.06
RYVNX:   19.45
RYAIX:  22.47
TLT:  88.28
BEGBX:  12.88