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Dow, SPX, OEX finish month with gains, while NDX finds losses

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A late session lift had the Dow Industrials (INDU) 10,173.92 +0.50% posting a 51-point gain and that was good enough to have the world's most recognizable stock market benchmark finishing the month of August with a fractional 34-point gain.

An ending session spat of buying, which had the look of some end of month painting of the ticker tap, also had the broader S&P 500 Index (SPX.X) 1,104.24 +0.46% posting a 2.5-point gain for the month, while its narrower brethren and the S&P 100 Index (OEX.X) 538.77 +0.41% managed to eek out a 1.10-point gain for August.

While technology sectors reversed the bulk of their losses in today's session, the Semiconductor Index (SOX.X) 371.02 -0.7% finished down 2.6 points as brokers continued to caution ahead of Thursday's mid-quarter update from Intel (NASDAQ:INTC) $21.28 -1.48%, which did trade a new 52-week low. The SOX.X fell an additional 45 points, or 10.9% in August, adding to July's 68- point decline (-14.15%).

The continued battering in the chips had the tech-heavy NASDAQ- 100 Index (NDX.X) 1,368.68 +0.05% falling 31 points in August, or 2.26%, after falling a more substantial 116 points, or 7.66% in July.

U.S. Market Watch - 08/31/04 Close

In tonight's U.S. Market Watch, I jotted down some of the conventional simple moving averages I and a lot of traders will use with PINK=21-day, BLUE=50-day and RED=200-day.

Good gravy! The very broad NYSE Composite ($NYA.X) is challenging its 200-day SMA by today's close and while closing above this longer-term and still trending higher 200-day SMA on Friday, buyers have not yet been able to get a meaningful move back above. When we review tonight's Market Snapshot/Internals, my one thought here is that the bullish leadership may be getting a little over-extended and while new highs are growing and new lows are abating, buyers may be hesitant to push the envelope further.

Remember the S&P Retail Index (RLX.X) 388.92 -0.13% and observations made as it has been battling with its 200-day SMA, where despite today's release of consumer confidence figures, held steady above all three simple moving average.

I tell you what. The more I reflect on the rebound the major indices had from the 2002 lows and look at the AMEX Gold Bugs Index ($HUI.X) which has been showing some life of late, I can't help but think the hints of bullishness returning to this sector might not also be a "heads up" from the MARKET that some type of "reflation" for the economy is in the making.

Since hitting a yield high of 4.904% in mid-May, the benchmark 10-year YIELD ($TNX.X) has fallen to a suspicious 4.132% yield. What's suspicious about this level is it is right where the benchmark bond's yield closed on April 2, 2004. That was the day the bond market was sent into a tail spin and Treasuries saw sharp selling when the March nonfarm payroll figures surged to a surprising 353,000.

Market Snapshot / Internals - 08/31/04 Close

The very broad NYSE hung tough for the bulk of the session with its A/D line never dipping into negative territory, and while volumes remained light, a little energy burst in the final hour of trade did have volume breaching the 1 billion-share mark, after two consecutive sessions of sub 1 billion volume.

NASDAQ struggled throughout but after turning just over 100 million shares per hour, four and five-lettered stocks also got some buy side volume.

Other than the first 30-minutes of today's trade, TRIN spent the bulk of today's session above 1.0. This makes two consecutive sessions above 1.0. Shorter-term traders might want to keep this in mind as TRIN gravitated back toward 1.0 from about 12:00 PM.

Pivot Analysis Matrix - (New MONTHLY Pivot Levels)

Today we update the MONTHLY Pivot matrix with new MONTHLY levels, where all equity-based indices close ABOVE their MONTHLY Pivot, which the Semiconductor Index (SOX.X) being the lone exception.

We can really see the stagger in the WEEKLY Matrix where the SOX.X now lingers just BELOW its WEEKLY S1, the NDX/QQQ close right on their WEEKLY S1, with the majors (INDU, SPX, OEX) right around their weekly Pivots, as if positioned "neutral" into Friday's nonfarm payroll numbers.

The S&P Banks Index (BIX.X) 362.28 +0.81% came within fractions of its March 5 all-time high of 362.64, but is first among the equity-based indices to get a trade at WEEKLY R1.

S&P 500 Index (SPX.X) Chart - Daily Intervals

With MONTHLY Pivot retracement redrawn, there's really little change at MONTHLY S2 and MONTHLY R1, but lowering of MONTHLY R2 has the MONTHLY Pivot (1,091.55) for September moving lower, where last month's (August) 61.8% retracement of 1,092.77 had been. I take note of this as a key level of near-term support.

Today's close for the SPX looks rather bullish above a new "overlapping" level at 1,103, and overlap from last night's review of the SPX at 1,107 has vanished.

Are computers exhausted for selling near-term? They seemed like it in the final hours of trade. With the NYSE Composite ($NYA.X) 6,454 +0.61% challenging its similarly rising 200-day SMA for a third-straight session, it has to be the technology components of the SPX holding it back. It certainly isn't the banks.

Jeff Bailey

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