Ahhhh… Doesn’t that feel better, to have the Dow at an all time new high? The bulls around the world are feeling like they have just been admitted to the top of the world party. The Dow stands a full 4 points, maybe a little more than that, above its previous high set more than six years ago back in 2000.
We here at the Update don’t think this is such a big milestone but it does represent a major nonconfirmation in the other indexes. As long as the Dow was able to stay below its previous high the market could pretend that it had time to catch up to the Dow. The Dow is a popular index, followed by the world, so we have no doubt there are celebratory feelings in the hearts of the bulls.
Tuesday’s rally in the market started from a weak opening (seems like a pattern) and the Dow led the market the whole day from that point. For a while it looked like the Dow was going to put in a powerful up day but late in the day the Dow could barely manage to hold the New High that it made during the morning. The Dow traded up around 90 points, bouncing back and forth from up 60 to up 90, before closing up about 57 points.
The SP 500 failed to best its highs from last week. The NASDAQ indexes fell short, too. In fact, the Russell 2000 didn’t even get close to last week’s highs. The SOX index seems to have vanished so we will mention the other semiconductor index the SMH, a semiconductor Holder, which fell on Tuesday. This index noticed a preannouncement from MRVL, Marvell Technology, that caused MRVL to drop 12% on the day. MRVL is a fairly small company but today’s news made it 12% smaller.
The commodities had some dislocations today with oil dropping 4% to under $59 a barrel. The precious metals followed suit with silver dropping 5% and gold nearly 4%. These are big numbers and do show some weakness in this arena. The HUI, our mining stock index, was down 20 points to 282 and we are paying attention for a good opportunity here. We need to be patient.
Dow Industrials: 11,727.34 +56.99