Countdown 6...5...4

- It's not what you look at that matters, it is what you see.

- Henry David Thoreau

Market Call

We continue with our countdown call for a market correction after our Fourth of July holiday. The first week had little change. Last week, we saw the first real sign with the recent market leaders (chips) falling hard. Some high tech firms like IBM, Micron (MU) San Disk (SNDK) fell off a cliff.                                  

IBM = -74 points and in bear territory.                                                                                                    SNDK = -561 points and in bear territory.                                                                                                MU = -130 points and close to bear levels.

Not Everything

The banks like we called had banner profits. Apple (APPL) was up almost 6% on good volume. Brent oil closed up 15% for the week at its high of $88.05. This is very inflationary. The two big, recent IPOs fell hard on strong volume. SPCX is below its original, asking price. SKHY fell on double its initial offering and close to its original, asking price. Not good.

Unemployment

We never believe the BLS on employment. We look at the participation rate. It fell again. In fact, this is the lowest level (61.5%) in the last 50-years. Terrible!

Finally, the Scoreboard

Industrial (INDU)   = down on good volume.                                                                                                S&P 500 (SPX)      = down on strong volume. The lower resistance price is 7473.                                    Transports (TRAN)= up on lower volume and far from its high.                                                                  Nasdaq (COMPQ)  = down on average volume.                                                                                          Russell (IWM)        = down on rising volume.

Bottom line: If our call is correct, we should see another down week. However, we point out that the transports must be in harmony with the industrials. They are not. The ongoing saga of AI and data centers will continue to impact the market. We see the rising costs to high tech. This will lead to more borrowing and hurt the bottom line. We noticed a rumor. It says that the Fed will start some type of QE by the end of the year? The Fed's next meeting at the end of the month will answer a lot of questions, especially for those who took a "wait and see" attitude. Finally, in the mixing bowl of everything that is going on in the world, King $Dollar remains strong...Peace.