After the longest rally since December 2011 the S&P 500 finally snapped the 6 day winning streak. Most likely we’ll continue to see the market heading up until we hit 1425 on the S&P 500 where there is resistance, and then head lower with perhaps a 1385 low before then rallying 5-10% into year end.
With the announcement of Congressman Paul Ryan as Republican Presidential nominee Mitt Romney, we can now be assure that the Fiscal Cliff will come to the forefront of this years election debates. Interestingly Mr. Ryan seems a fairly good stock picker (perhaps he could lend some advice to Uncle Sam) with positions in: Apple (AAPL), Amazon (AMZN), Priceline (PCLN), Visa (V), Altria Group (MO), Phillip Morris (PM), Whole Foods (WFM), and Berkshire Hathaway (BRKB). Many of those stocks are owned by D&D Investments.
Volume is still week with the summer doldrums and policy makers (i.e. every politician in Europe) all on vacation. Today with no macro news markets basically churned flirting with the over/unders on 1400 on the S&P 500.
The DOW (INDU) lost 38.52 points at -0.29%. The S&P 500 (SPX) fell 1.76 points at -0.13%. And the tech heavy Nasdaq (COMP) rose 1.66 points at 0.05%.
Following our rotation theme from last week, shares of Disney (DIS) is holding well in its current upward channel. If we can see a gap fill back to $49 which represents the bottom of the channel, it could be a good time begin a position in the company. All though investors must have a short time frame for any purchases now as we most likely will see a small correction after the Jackson Hole meeting of the FED, where the odds are that no additional QE will be announced.
Disney (DIS) 10 Week Chart:
Another rotation stock that rallied hard today was Oil & Gas operator Tesoro Corp (TSO) which was up 9.49% on the day and closing at $33.87 a share.
Oil fell 14 cents today to close at $92.73 a barrel.
Gold lost $10.20 to close at $1,612.60 an ounce. If we see any short term rally in Gold it may be wise to take some off the table in case we don’t get any Dovish moves from Central Banks.
The 10-Year Note remained flat with the yield at 1.64%.