Top Line: The stock market had a little more spunk on Wednesday but the highs of the day occurred right around mid-day. After that, the indexes started to slip but still ended up but well off its highs. We are still thinking that the market is in the early stages of a major decline.
There are some near term possibilities in the market but the August 15th highs should hold. If they don't, we'll look at the upside potential. Since we don't think that will happen, we will postpone our discussion on it.
This morning, durable goods orders news indicated an "unexpected" jump in July. Meanwhile oil "jumped" $2 this morning which would normally suggest a huge drop in the stock market but Not today. No, today the Dow "jumped" on the oil/durable goods orders. Did we ever mention that we don't think the Dow moves because of the price of oil? Yes, we may have.
The market is trying to hold out, and it may hold out for another few days until after Labor Day, but ultimately we think it will succumb to the sellers.
FSI: 82.85 (down again on Wednesday)
VXO: 21.68 -0.04 (heading up to 50)
SDS: 65.44 -1.14
QID: 41.30 -0.37
Dow Industrials: 11,502.51 +89.64