FirstAlert(tm) Daily 7/6/10: S&P 500 Below Critical Support

- Technical Market Commentary -

July 6, 2010 (FinancialWire) (By Frank Kollar) (Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.) — Both the S&P 500 Index (SPX) and its tracking ETF the S&P Deposit Receipts (NYSE: SPY) are well below critical support levels. On Thursday, July 1, the start of the third quarter, the intra-day lows broke below the correction lows reached all the way back on October 2, 2009. Anyone buying the S&P 500 Index since early February 1998 is underwater. That is twelve years ago, and SPX is lower today than when investors bought into the stock market.

What could be safer than buying 500 of the world’s largest blue chip companies?

Thursday’s intra-day low was right at the 50% retracement of the July 2009 to April 2010 stock market advance. That 50% level, which is acting as support, is at SPX 1009.80. Right below of course is the SPX 1000 level. It would generate huge bearish headlines if broken, and we would agree that a break below SPX 1000 would be just that, hugely bearish.

Going into Friday, SPX support was at 101.06, with SPY’s 100 level right below.

(Go to http://www.financialwire.net/?s=frank+kollar for other recent commentaries by Frank Kollar.)

The FirstAlert(tm) “Money Index” is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ/AMEX 25 most actives and NYSE/NASDAQ/AMEX greatest percentage losers and greatest percentage winners (weighted against pure monetary loss/gain) indicate the direction in which the mass of money is flowing, as well as the general focus of the market. Last session’s most actives showed 6 advancers versus 19 decliners. Volume Leaders were led by the SPDRS S&P 500 Trust ETF (AMEX: SPY) (streaming research for SPY available at http://investrend.stocksmart.com/ri/toc?tid=34430), Citigroup, Inc. (NYSE: C) (streaming research for Citigroup available at http://investrend.stocksmart.com/ri/toc?tid=7921), Bank of America Corp. (NYSE: BAC) (streaming research for BAC available at http://investrend.stocksmart.com/ri/toc?tid=1026233), the PowerShares QQQ Trust ETF (NASDAQ: QQQQ) (streaming research for QQQQ available at http://investrend.stocksmart.com/ri/toc?tid=1044870), Microsoft Corp. (NASDAQ: MSFT) (streaming research for MSFT available at http://investrend.stocksmart.com/ri/toc?tid=4652), General Electric Co. (NYSE: GE) (streaming research for GE available at http://investrend.stocksmart.com/ri/toc?tid=8030) and Intel Corp. (NASDAQ: INTC) (streaming research for INTC available at http://investrend.stocksmart.com/ri/toc?tid=3619).

The FirstAlert(tm) Economics Calendar lists the ISM Services Index for June (10 am ET)

The FirstAlert(tm) Earnings Calendar spotlights ADT.L Q4 2009; AIE.L Preliminary 2009; FLSMF.PK Q1 2011; PJC-A.TO Q1 2011.

Quote of the Day: "I drank to drown my pain, but the damned pain learned how to swim, and now I am overwhelmed by this decent and good behavior." –Frida Kahlo (07/06/1907 – 07/13/1954), Mexican artist (was married to Diego Rivera).

Word of the Day: evanescence \ev-uh-NES-ens\, noun: 1. A gradual dissappearance. 2. The state of becoming imperceptible.

In context: “But this was an evanescence, and quickly repented of, as it were, by an immitigable look, pinching and shriveling the visage into the momentary semblance of a wrinkled walnut.” — Herman Melville, Billy Budd, sailor: (an inside narrative).

(Evanescence is from Latin evanescere, "to vanish," from e-, "from, out of" + vanescere, "to disappear," from vanus, "empty.")

Today is: Take Your Webmaster To Lunch Day

Happy Birthday: 1921 – Nancy Reagan, First Lady of the United States; 1935 – Tenzin Gyatso, 14th Dalai Lama; 1945 – Burt Ward, American actor (“Robin” on the original Batman TV series); 1960 – Asahifuji Seiya, Japanese sumo wrestler, the 63rd Yokozuna; 1975 – 50 Cent, American rapper; 1982 – Brandon Jacobs, American football player (NY Giants).

Today in History: 371 BC – The Battle of Leuctra, where Epaminondas defeats Cleombrotus I, takes place; 1189 – Richard I "the Lionheart" is crowned King of England; 1484 – Portuguese sea captain Diogo Cão finds the mouth of the Congo River; 1785 – The dollar is unanimously chosen as the monetary unit for the United States; 1892 – 3,800 striking steelworkers engage in a day-long battle with Pinkerton agents during the Homestead Strike, leaving 10 dead and dozens wounded; 1942 – Anne Frank and her family go into hiding in the "Secret Annexe" above her father's office in an Amsterdam warehouse; 1957 – John Lennon meets Paul McCartney at a fete in Woolton; 2003 – The 70-metre Eupatoria Planetary Radar sends a METI message (Cosmic Call 2) to 5 stars: Hip 4872, HD 245409, 55 Cancri (HD 75732), HD 10307 and 47 Ursae Majoris (HD 95128). The messages will arrive to these stars in 2036, 2040, 2044 and 2049 respectively.

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Disclosure: Frank Kollar’s Fibtimer.com ETF Timing Strategy has a position in the S&P 500 SPDRS.

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