It is pretty clear that option expiration players are trying to hold up QQQQ 36 and we could very well get up to 38 by week's end, barring a disaster. The markets have pretty much figured out that the war between Israel and Hezbollah will not broaden into a wider conflict and is now focused on earnings and inflation. Speaking of inflation, the drop in gold is telling us that the markets are accepting another rate hike, thus tempering the danger of inflation. Watch 642, key support. The rising rate scenario is not going to help stocks for very long, so one hopes Bernanke looks at the incoming data as not fully reflecting the downward pressure he has applied to the economy. I certainly hope he decides to pause in August, if not to just sit back and analyze more data, which for the most part is lagging.
This entry was posted
on Tuesday, July 18, 2006 at 7:08 AM.
