Tuesday, August 23, 2005

Stocks Quietly Mixed Mid-day, Continuing Recent Consolidation

Indices
S&P 500 1,219.51 -.18%
DJIA 10,541.55 -.26%
NASDAQ 2,139.17 -.10%
Russell 2000 655.72 -.27%
DJ Wilshire 5000 12,151.91 -.18%
S&P Barra Growth 583.87 -.12%
S&P Barra Value 631.15 -.27%
Morgan Stanley Consumer 583.99 -.15%
Morgan Stanley Cyclical 737.86 -.72%
Morgan Stanley Technology 496.92 +.02%
Transports 3,674.41 -1.33%
Utilities 400.05 +.89%
Put/Call 1.09 +21.11%
NYSE Arms 1.20 +4.32%
Volatility(VIX) 13.55 +.97%
ISE Sentiment 219.00 +37.74%
US Dollar 88.06 -.10%
CRB 316.97 -.05%

Futures Spot Prices
Crude Oil 65.55 -.15%
Unleaded Gasoline 184.10 -1.11%
Natural Gas 9.63 +.69%
Heating Oil 181.90 +.41%
Gold 444.30 +.29%
Base Metals 130.96 -.44%
Copper 164.30 +.12%
10-year US Treasury Yield 4.17% -.78%

Leading Sectors
Networking +.66%
Utilities +.66%
Tobacco +.60%

Lagging Sectors
Homebuilders -1.27%
Oil Tankers -1.50%
Steel -2.60%
BOTTOM LINE: The Portfolio is higher mid-day on gains in my Medical and Semiconductor longs and Oil Tanker shorts. I added OS short this morning and added to existing longs, thus leaving the Portfolio 50% net long. I am using a $23 stop-loss on this position. The tone of the market is negative as the advance/decline line is lower, most sectors are declining and volume is light. Measures of investor anxiety are mostly higher. Today’s overall market action is slightly negative. The Johnson Redbook same-store sales index rose 3.90% year over year last week vs. a 3.8% rise the prior week. This week's gain is up from a 1.5% increase in late April and the 16th week in a row the index has exceeded 3%. I see very little evidence of any significant consumer weakness. Last month's "disappointing" retail reports were mostly a function of elevated expectations, near-record home sales, soaring auto sales and very hot weather. I am still looking to purchase shares of select retailers over the next few weeks for what I believe will be a strong year end. I expect US stocks to trade mixed-to-higher from current levels into the close on modestly lower interest rates and energy prices.

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