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Networking still "not working"

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If you thought making trading decisions were tough between ranges, what would a bear be doing in the Networking Index (NWX.X) at current levels? You can almost bet they're eyeing the lows dating back to August of 1999 near 520.

Networking Index Chart - last seven months.

The NWX.X looks like it might be in "no mans land" and this makes for tough trading, whether you're long or short. Bearish traders with big profits still riding to the downside might want to lock some of those gains in if this index were to move above today's high 586.

S&P Retail Index Chart - last seven months.

The RLX.X has been one of the stronger sectors we've been monitoring. If traders have built trading plans with the scenario that the economy will be strong in the future, this index needs to hold current levels for that scenario to stay intact. In the above update, we're monitoring a "weak index" in the NWX.X and a "strong index" in the RLX.X. Right now they're both headed lower and that should have bullish traders very cautious!

Jeff Bailey
Staff Analyst

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