Key Equity Market Indicators




Symbol $ Chg. YTD % Chg. YTD $ Chg. 3rd qtr. $ Chg. MOM July $ Chg. WOW

DIA $1.85 1.80% $6.97 $6.97 $0.43

SPY ($0.19) (0.17%) $7.05 $7.05 ($0.14)

QQQQ $0.20 0.44% $3.10 $3.10 ($0.25)

VXX ($11.50) (33.75%) ($8.63) ($11.50) ($1.08)


The above are some of the key indicators that I closely monitor to gauge the breath of the market. As you can see from the chart above, the bulls made an impressive bullish move in the month of July 2010 given higher than expected 2Q earnings announcements. Consequently, the DIA and the Q’s are up for the year while the S&P 500 is close to flat. I have also noticed that copper prices, especially buyers in the three month contracts have increased within the last two weeks and there is a positive correlation so far between copper prices and the S&P 500. Notwithstanding, the currency pair USD/JPY is trading near an all time low and yields on US debt obligations, especially within the front end of the curve have appreciated within the last few weeks. Thus, indicating a slowdown in economic growth and potentially further declines in the equity markets. Furthermore, the traders took some profits off the table at the end of the month even though the bulls fought strongly in last two days of trading in July.

Normally July is the best performing Dow and S&P month for the 3rd quarter and the summer rally is the weakest of all quarters. Consequently, I anticipated that the month of July 2010 will be a strong month given the noted favorable earnings announcements while a wave of negative economic reports was being released (i.e., lower US and global GDP figures, July’s Beige Book minutes, and etc). I anticipate that both August and September months will be down months and bearish given the latest economic reports, lack of buying power of the consumer, it’s a midyear election year, and it’s a double zero year.