Dell, Technology Stocks Lead Market Lower

DJIA - 171.63, -147% SP500 - 17.85, -1.37% NASDAQ Comp. - 44.12, -1.83% Russell 2000 - 8.29, -1.11% Exchange NYSE NASD Advancing 1,131 1,051 Declining 1,931 1,811 Oil $115.46 -$0.13 Gold $835.00 -$2.20 $SOX 352.82 -10.01 Strongest Sectors: XLF +0.14%...XLE-0.47%...XLB -0.67% Weakest Sectors: XLK -2.23%...XLU -1.39%...XLY-1.13% Monday Evening...After it became apparent that Gustav did little damage to oil resources in the Gulf...in electronic trading...oil which had traded as high as 118 earlier Monday fell below 111...late Monday evening quoted at $110.98. If quotes lower Tuesday morning...look for continued move up in airline stocks...AMR, CAL, DAL, LCC, UAUA Friday saw some interesting trading. DELL on Thursday after the close reported disappointing earnings. That set the tone for selling tech stocks Friday morning and that trend held for most of the day. The Nasdaq Composite actually fell more points on Friday than it had gained on Thursday. The other broad indices held some of Thursday's gains, with the RUT the strongest of the four, holding on to nearly 50% of its gain. DELL finished the day down more than 13%. Selling also occurred in other major Nasdaq stocks AAPL, RIMM, QCOM, MSFT, GOOG, ORCL, INTC and CSCO. These nine large cap stocks accounted for 57% of the 42 point drop in the Nasdaq 100. Also playing a major factor was the decline in the PHLX Semiconductor Index, SOX, which fell 10.01 points or -2.76%. This is consistent with the view if major tech businesses DELL and others appear weak, then selling semiconductor stocks is a logical conclusion. Tropical storm Gustav and the price of oil which was up in early trading also fueled some of the early selling on Friday. In the end oil finished down for 13 cents for the day. Financials, XLF, were the only positive sector gaining just 3 cents. Energy, XLE, was the second strongest losing 35 cents. Technology, XLK, as you would expect was the weakest sector losing 52 cents. Our short-term trend status is up and neutral for the Nasdaq. Sector Watch Up Trending: XLI, XLK, XLP, XLV, XLY Sideways: XLB, XLF Down Trending: XLE, XLU Index Commentary The DJIA finished up 165 points in August...July was up 29 points...April was the only othe up month in 2008...down 85 points for the week...closed above Thursday's S2 level and at its 20 DMA...is trading above its 20, 30 and 50 DMA...intermediate term trend is neutral. The SPX closed up 15 points in August...was up in April and May...down 10 points for the week...closed at its 20 DMA and just below Thursday's S2/S3 level...trading above its 20, 30, and 50 DMA...intermediate term trend is neutral. The Nasdaq closed up 42 points for August...its fifth positive month in 2008...down 47 points for the week...hit its 200 DMA on Thursday...bounced down Friday below its 20 DMA...trading above its 30 and 50 DMA...intermediate term trend is up. The RUT closed up 25 points for August...its fifth positive month in 2008...up 1.90 points for the week...closed above its 200 DMA for the sixteenth straight day and 17 of the last 18...trading above its 20, 30, 50 and 200 DMA...intermediate term trend is up. Stock Commentary FMCN broke out of horizontal resistance continuing a bull flag bounce...new chart target 35.85 GS continued support bounce in sideways trend MER continued support bounce from 7-week basing pattern...closed just above 50 DMA UAUA closed up 11 cents following a bullish engulfing pattern on Thursday in a bull flag pattern LCC closed up 33 cents following a bounce off its 30 DMA...appears to be forming an ascending triangle Friday’s Action Moving Up: DECK, FMCN, AGU, IPI, GS, CF, MER Moving Down: RIMM, AAPL, PCLN, IBM, STRA, AMZN, POT, MON, BTU, FNM, FWLT, BIDU, SOHU, FSLR, BUCY, EXPE, GRMN, FRE, MEE, PNRA, BRCM, ESRX, SNDK, NIHD, CELG Intermediate Term Market Trend: Up Short Term Market Trend: Up (except Nasdaq)