... The Standard & Poor's 500 Index finished at 1,472.20, 6.39 points as stocks rallied late based on strong profits that temporarily offsetting credit concerns. With the index at the top of 1450 to 1472 trading range, the market has sufficient momentum to test 1490, last hit on July 7th. Use the bullish enthusiasm by taking profits, eliminating laggards and accumulate cash. Stock lack the necessary dynamics for a sustained upside, nor is the economy sufficiently positioned to insure future corporate earnings growth for the next three quarters. ... With the U.S. stock market's advance, the dollar rose against the yen, which reduced pressure of the carry trade. The dollar must strengthen further to insure moderate liquidity in the international markets and keep oil prices from rising higher. ... The Reuters/University of Michigan's consumer sentiment index rose to 90.4 in July, down from the early-month reading of 92.4 but a big bounce from June's 10-month low of 85.3. Yet, there's more evidence that shoppers are tiring as consumer spending - the most important element of the economy - rose only 1.3% in the second quarter, down from a 3.7% in the first. Housing activity keeps falling as residential construction continues to drop, and reduce GDP growth by three percent. Right now the delicate balance between jobs, wages and equities are being offset by higher energy price and weakening consumer liquidity. Further weakness in consumer spending would make equities expensive and subject them to a deeper correction. Beware of the October winds.

... August 2, 2007, 7:30am ... S&P 500 index closed at 1,465.81 10.54 to create a technical base to build further gains from. Stocks ended a wild ride solidly higher as the final hour provided an opportunity for bargain-hunters to jumping into an oversold market after a choppy day fueled by discomfort over the shaky housing and credit markets. Whether it lasts is immaterially providing you focus on the technical indictors of 1450 to 1472. The S&P needs upside confirmation from 1472 to warrant a long bias. ... Factory growth in United States slowed more than expected in July, while a key housing statistic appears suspect, created further anxieties about the economy.The Institute for Supply Management reported that its U.S. manufacturing index slid to 53.9, down from June's 14-month high of 56 and below Dartline's projection of 54.3. Look for further weakness in the next three quarters and the only reason why the number isn't lower remains the war in Iraq.

... August 1, 2007, 3:50pm ... The S&P 500 closed at 1,465.81 10.54 +0.72% and insured support above 1450 when the level was covered. .... The S&P 500 index is below the 200-day moving averages at 1445.09, representing a major sell signal. ... 7:30am ... The S&P 500 Index closed 1455.27 18.64 (1.26%), as 1472 becomes the new upside test. Only a few point separates technical disaster from the index falling below its 200-day moving average at 1450, and therefore too much uncertainty for the market to trade up with conviction. Use patients, take profits, reduce positions and conserve cash is the game plan ... Liquidations from U.S. stock funds totaled $3.03 billion in June, versus $10.1 billion in May. Cash in stock funds at the end of June stood at 3.6% of assets, about the same as in May and near the low end of the range in recent years. Not a current problem, yet one that can create a major selling wave if investors get a bit more nervous, especially as crude oil topping $75 a barrel heading towards $100. ... Crude oil futures climbed above $78 a barrel , a record closing for a benchmark contract on the New York Mercantile Exchange. The previous record close was $77.03, recorded July 14, 2006. ... August reformulated gasoline climbed 5.52 cents, or 2.7%, to close at $2.1408 a gallon, and August heating oil ended at $2.10 a gallon, up 3.49 cents. September reformulated gas closed up 4.67 cents at $2.1059, while September heating oil added 4.01 cents to close at $2.1232. Right now, consumers have not been fazed by high prices at the pumps. What would the deal be at $81-$82.50 within the next 30 days -- (without a supply disruption from any geopolitical or weather event) --? The consumer will suffer, not only from the pumps, but indirect costs from a goods or services relying on petroleum. Hyper-inflation will make subprime loan delinquency a mere hiccup.

... July 31, 2007, 3:22pm .... Failure of S&P 500 index to return to break even for the day, will pull the market lower. At 1472, a technical barrier becomes resistance. As indicated, trade both sides, but consider a short basis. ... 8:30am .... Core consumer inflation increased 0.1% for the fourth consecutive month in June, pushing the yearly gain in core inflation down to the lowest level in three years, the Commerce Department is good for stock - price index rose 1.9% in the past year, the lowest inflation in three years, and just within the Federal Reserve's unofficial comfort zone of 1% to 2% for core inflation. Core inflation excludes volatile food and energy prices. Overall inflation also increased 0.1% in June, the lowest monthly inflation since November. Overall inflation is up 2.3% in the past year. The Federal Reserve has said that an acceleration of inflation remains the chief risk to a stable economy. The Fed will remain on inflation alert until moderate inflation is sustained over a long period.What the deal about oil - Does higher oil prices create inflation? Something stinks at Stockrock! ... However, as you plan to selective participate on both sides of the market maintain a balance view while reducing exposure to the financial sector, taking profits and eliminating laggards that lack a definitive story.