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Late Day Fade

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After holding in positive territory for most of the day, the Nasdaq and S&P have joined the Dow in negative territory. Part of this afternoon's reversal comes from the release of the minutes fromm the Fed's June 27 meeting. The Fed thought the economy had weakened faster than expected, but felt that lower interest rates, tax cuts, and lower energy prices would help the economy to regain strength. A number of the members felt that the Fed might near the end of the easing cycle, but low inflation allows the Fed to take further action if warranted.

September T-Bond Futures

The news has pushed 30-year Treasury Bond futures to a four-month high. As buyers continue to flock to bonds, the 30-year is closing in on April Highs, right about the time stocks are closing in on April lows.

Software Index Daily Chart

Yesterday the Software Index (GSO.X) found support at 158, Jeff Bailey's "fitted" retracement level. Software was trying to move higher today to test 174, but has reversed course and is now down 1.79%. That puts GSO back towards support at 158, and then perhaps the April low at 153.

Jeffrey Canavan
Assistant Analyst
www.premierinvestor.net

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