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Markets Digest As Tech Stock Leaders Roar

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July 05, 2011 – Comments (1) | RELATED TICKERS: AAPL , AMZN , UUP

The market is pausing today after one of the biggest week long rallies in history. The Dow Jones Industrial Average gained over 6% last week, its biggest one week gain since July 2009. Today, the SPDR S&P 500 ETF (NYSE:SPY) is trading at $133.52, -0.40 (-0.30%). Volume is extremely light as many traders are extending their July 4th holiday, one extra day.  One of the main reasons for the slight market weakness is due to the Dollar. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading at $21.25, +0.05 (+0.24%).

While the markets seem to be pausing, some key technology stocks are continuing their surge. The leaders in the tech sector were up big last week and are continuing their run. Apple Inc. (NASDAQ:AAPL) is trading at $348.70, +5.44 (+1.58%), Google Inc. (NASDAQ:GOOG) is trading at $531.83, +10.81 (+2.07%) and Amazon.com, Inc. (NASDAQ:AMZN) is trading at $212.71, +3.22 (+1.54%). The only stock at new 52 week highs in the group is Amazon.

This strength in technology is based off of a renewed positive outlook for the economy after last week Greece was essentially bailed out. In addition, new money is flowing into the markets at the start of the third quarter. This usually has a short term positive impact as well. 

Gareth Soloway
InTheMoneyStocks.com

1 Comments – Post Your Own

#1) On July 05, 2011 at 1:14 PM, davejh23 (< 20) wrote:

Most indexes are in overbought territory after last week's rally.  There's a decent chance that markets turn sharply lower here.  The dollar tanked last week but appears to be turning higher right at the lower trend line in an upward trend. 

"This strength in technology is based off of a renewed positive outlook for the economy after last week Greece was essentially bailed out. In addition, new money is flowing into the markets at the start of the third quarter. This usually has a short term positive impact as well."

What does the 2 month bailout of Greece have to do with the outlook for the economy?  We continue to get negative news on housing, manufacturing, etc...  Some forward indicators are indicating that a recession may have already begun in Q2. 

What has happened at the beginning of the last few months?  From March on, we haven't made it past the first full trading week of a new month without beginning a significant move down.  Stocks have been sagging into the middle of each month and then rallying into the close.  Based on this trend and current technical setups, I'd say it's risk off short term...looking for oversold conditions mid-month.

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