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Index Wrap

Looks like short covering

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The major indices held their gains to close back near their session highs after and FBI terrorist warning for California and New Mexico sent jitters through the markets in the afternoon session.

Market Snapshot / Internals - 07/29/04 Close

Technology shares rose where optimistic outlooks from JDS Uniphase (NASDAQ:JDSU) $3.44 +14.66% and Taiwan Semiconductor (NYSE:TSM) $7.01 +3.54% may have at least fueled some short- covering.

New lows at both the NYSE and NASDAQ are notably fewer than earlier in the week, but there's a heck of a lot of work to be done at the new highs category to sense some type of bullish leadership presenting itself.

At more "oversold" 5 and 10-day ratios, Both the 5 and 10-day NH/NL ratios at the NASDAQ see some percentage improvement.

After seeing the NYSE NH/NL ratios show strength, but then get pulled back lower by the NASDAQ NH/NL ratios last weeks, I've got to think that a sustainable move higher for the markets would have to find a UNISON turn up in both the NYSE and NASAQ NH/NL indications.

Pivot Analysis Matrix -

The S&P 100 Index (OEX.X) traded almost smack between its WEEKLY Pivot and WEEKLY R1, where today's session high fell shy of WEEKLY R1. The Dow Industrials (INDU) 10,129.24 +0.12 was a percentage gainer underperformer on the session where one of its "Generals" in General Motors (NYSE:GM) $42.75 -3.10% provided negative weight and offset Intel's (NASDAQ:INTC) $24.23 +3.28% stellar gains.

At tomorrow's close, we'll get new MONTHLY Pivot levels, as well as new WEEKLY Pivot levels. It's been a struggle, but bulls have managed to push the major indices to their best levels of the week, with the SOX.X getting a trade at its WEEKLY Pivot for the first time this week. (In this weekend's Index Trader Wrap, I'm filling in for Leigh Stevens and will post charts with new WEEKLY/MONTHLY pivot retracement).

Perhaps last week's $874 million net equity fund inflows ARE being felt this week.

Hey! Even the Broker Dealer Index (XBD.X) 120.28 +1.45% managed to trade, and close the 120 level today.

It's notable that just a couple of weeks ago, when Intel (INTC) reported quarterly results, the company disclosed that a build-up in chip inventory due to the company's overproduction would negatively impact current quarter results until the excess inventory was moved out. Today, INTC closes at its highest level since quarterly earnings were released.

When Goldman Sachs downgraded General Motors (GM) today, GM's rising inventories was one of Goldman's critiques, or reasons for downgrading the world's largest automaker.

Jeff Bailey

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