The big story of the market session was the fact that Crude closed below a key support area of $130.00. This helped calm fears regarding inflation but perhaps the fear of a slowing global economy were overlooked. China’s second quarter GDP fell to 10.1% from 10.6% first quarter. Whether or not this is the beginning of a recession in China will remain to be seen, but taking a look at the fall in the Shanghai index one can all but wonder that the possibility of a recession is high. Here in the United States many believe we are in a “serious” recession, I believe its a perceived recession created by an overzealous media (this is another story). However, these fears have been somewhat dampened by the recent fall in crude oil prices. At the moment, we do see volume favoring the upside and are awaiting for the market to follow through.

Financials lead the market higher once again. This beaten up group is blowing off sever oversold conditions, but we don’t want to see a beaten up group lead the market. In new bull markets, we want to see new innovative companies with new products/services leading us higher. At this juncture we haven’t seen this yet. Yet, we are on Day 4 of a rally attempt for the NASDAQ and could see a follow-through day on Friday. If we begin to see new innovative companies starting to breakout I may change my mind about this market. However, we still did not see show Max fear at our lows signaling a bottom. I remain overly cautious about this market.

Enjoy

Market Speculator

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