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Alert, but no sign of fear

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Investors shrugged off morning jitters with blue chips extending their winning streak to five sessions after The Department of Homeland Security raised the terror alert level on Sunday to "orange," or high, for New York City, northern New Jersey and Washington, D.C..

Market Snapshot / Internals - 08/02/04 Close

Internals began to show some stability after today's 10:00 AM EDT release of economic data. While inline with economists' forecast, the July ISM purchasing manager's index showed modest improvement from June's 61.1 reading at 62.0, echoing both the gains from the regional New York Empire and Chicago PMI rebounds in July.

The NYSE A/D line turned positive just after 01:00 PM EDT, where perhaps a good fight from some of the "generals" helped bring in some buyers of 4 and 5-lettered stocks at the NASDAQ. From more "oversold" levels below 30%, the NASDAQ's 10-day NH/NL ratio threatens to reverse up into a column of "X" at 22%, while it would currently take a 54% reading for the NYSE 10-day NH/NL ratio to turn back higher.

S&P 100 Index (OEX.X) - Daily Intervals

The S&P Retail Index (RLX.X) 385.33 +0.41% managed to close above its 21-day SMA (384.52), but didn't see a test of its rounding flat 200-day SMA (387.08). OEX heavyweights, retail heavyweights, and Dow components Wal-Mart (NYSE:WMT) $53.18 +0.32% and Home Depot (NYSE:HD) $34.03 +0.91% looked to provide some mid-session leadership, but faded from respective highs of $53.73 and $34.22 later in the session.

Pivot Analysis Matrix -

The S&P Banks Index (BIX.X) 351.31 +0.73% spent the first half of today's session below its MONTHLY Pivot, finding support from a rising 50-day SMA. As the clock struck 01:05 PM the banks made their move above MONTHLY Pivot and Friday's close, with the broader S&P 500 Index (SPX.X) following 5-minutes later above 1,102.00 as some "blue coated bulls" joined their generals for the push higher to the close.

"The Generals" - 33-most heavily weighted OEX components

Note: * denotes a Dow Industrials (INDU) component.

The "generals" were able to rally some of their troops and lead the major indices to fractional gains where 29 of the 33-most heavily weighted OEX components found gains on the session.

Jeff Bailey

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