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Anemic volume finds fractional gains and losses

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The very broad NYSE Composite ($NYA.X) 6,227 squeaked out a 2- point gain, while the also very broad NASDAQ Composite ($COMPQ) 1,775 extended its losing streak to five sessions, where anemic volume hints investors were unwilling to make too many bets ahead of tomorrow afternoon's FOMC decision on interest rates.

Market Snapshot / Internals - 08/09/04 Close

Economic data released at 10:00 AM EDT found little response when the government said June wholesale inventories rose 1.1% while sales remained flat, with the inventory to sales rising from record low reading of 1.13 to 1.15.

Pivot Analysis Matrix -

The major indices traded tight intra-day ranges, where mid- session gains faded toward the close. The Dow Industrials (INDU) traded a very narrow 47-point range, and like most of the major indices in our pivot matrix had a difficult time retesting their MONTHLY S1s.

Dow Industrials (INDU) Chart - Daily Intervals

The Dow Industrials (INDU) finished relatively unchanged, where breadth ended up negative at 16 to 14 after running much more positive throughout the bulk of the session. Merck (NYSE:MRK) $44.07 +1.07%, General Electric (NYSE:GE) $31.85 +1.04% and Exxon/Mobil (NYSE:XOM) $45.56 +0.97% ended up being component winners, while Intel (NASDAQ:INTC) $22.57 -0.87%, McDonald's (NYSE:MCD) $26.16 -0.68% and Coca Cola (NYSE:KO) $43.22 -0.64% made sure the Dow wouldn't finish in the green.

With Friday's nonfarm payroll figures weak, the Fed will most likely be "wrong," regardless of its decision on interest rates tomorrow. Leave them unchanged and market participants will read "the Fed sees recession on the horizon." Raise a quarter point and with sentiment negative, market participants will read "the Fed has lost its mind as economy isn't generating jobs."

Jeff Bailey

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