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Get Ready for the Next BIG Move

By Jeff Clark
Tuesday, August 31, 2010

The Wall Street bigwigs must be proud.
 
Three months ago, before they headed off to the Hamptons for a summer of fun and sun, the big shots likely told their underlings, "Don't make waves. No big moves. Keep things quiet and don't give me any reason to come back from vacation early."
 
As you can see from the following chart, the underlings performed well...
 
 
The S&P 500 is ending the summer just about where it started. Despite one Hindenburg Omen, two Federal Open Market Committee (FOMC) meetings, three monthly employment reports, and thousands of corporate earnings releases, stocks have gone nowhere.
 
It's remarkable, really. Investor sentiment has gone from bearish to bullish and back again, with very little change in stock prices. Oh sure, we've been 4% higher or lower. But that's nothing in a market that's so rife with emotion that 100-point reversals in the Dow Jones Industrial Average are commonplace.
 
The engine of the stock market only has two gears: It either trends or consolidates. For the past three months, we've been consolidating – idling in neutral and occasionally revving the engine to try to impress the spectators on the sidelines.
 
Most traders struggle in a consolidating market. They're anxious to do something, anything, to turn a fast profit. They need to justify the endless hours spent staring into the computer screen at the blinking red and green ticker symbols. So they rush in and out of positions with each roar of the market's engine. But without any real movement, most traders end up churning their own accounts and are out of fuel by the time the market is ready to trend.
 
Never underestimate the value of patience.
 
Sometimes, there just isn't anything to do. This summer has been one of those times.
 
That, however, is about to change. Like swallows returning to Capistrano, the Wall Street bigwigs will soon be flocking back to their trading posts. Labor Day signals the end of summer and likely the next big trending move for the stock market.
 
It has been a long, inactive summer for traders. But the potential for a big move this fall is enormous.
 
Get ready for it.
 
Best regards and good trading,
 
Jeff Clark




In The Daily Crux Recent Articles
Market Notes
Precious metal stocks continue huge rally... new 52-week highs for Allied Nevada Gold, Eldorado Gold, Nevsun Resources, Silver Wheaton, ATAC Resources, AuEx Ventures, and Aurizon Mines.
 
Back of America strikes another 52-week low.
 
Major homebuilder NVR hits new 52-week low.
 
Natural gas trying to find a bottom... down 23% in last month to $3.83, where it has found support over the past year.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1049.33 +0.0% +2.8%
Oil 31.92 -3.3% -11.5%
Gold 122.08 +1.0% +30.7%
Silver 18.93 +1.6% +29.5%
US-Dollar 83.10 0.0% +6.4%
Euro 1.27 +0.2% -11.5%
Volatility 26.05 -4.3% +0.2%
Gold Stocks 487.89 +1.2% +36.6%
10-Year Yield 2.48 -2.8% -27.1%

World ETFs
Symbol Price
Change
52-Wk
USA 105.31 +0.0% +2.8%
Canada 26.10 -0.4% +9.8%
Russia 18.18 +0.9% +4.7%
India 32.80 +0.2% +23.2%
Israel 14.53 -0.1% +10.2%
Japan 9.38 -1.2% -8.2%
Singapore 12.16 +0.2% +18.9%
Taiwan 12.14 -0.7% +12.0%
S. Korea 47.79 -0.3% +14.9%
S. Africa 58.40 +0.8% +12.0%
China 39.29 -0.2% -0.1%
Lat.America 45.21 +1.6% +17.8%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 97.35 -1.4% -7.5%
Big Pharma 60.26 -0.1% -6.4%
Internet 55.66 +0.4% +22.4%
Semis 11.42 -1.5% -6.9%
Utilities 30.81 +0.5% +5.4%
Defense 15.79 -0.8% +2.1%
Nanotech 7.88 -0.6% -23.2%
Alt. Energy 8.56 +0.4% -13.2%
Water 14.68 -0.2% -8.2%
Insurance 14.36 -0.4% +5.1%
Biotech 17.57 -0.5% +4.4%
Retail 15.60 -0.1% +3.2%
Software 20.32 -0.4% +11.9%
Big Tech 43.46 -0.3% +8.6%
Construction 11.02 -0.4% -9.2%
Media 10.96 -0.3% +11.4%
Consumer Svcs 54.97 -0.2% +10.2%
Financials 48.98 +0.6% -5.4%
Health Care 58.02 -0.5% -0.7%
Industrials 52.11 -0.3% +9.7%
Basic Mat 58.67 +1.1% +16.0%
Real Estate 50.98 +0.9% +25.6%
Transportation 74.64 +0.1% +13.1%
Telecom 20.03 +1.0% +12.8%