Interesting Technical Formations.

All three composites, the NASDAQ, the DOW and the S&P are once again poised for a picture perfect double bottom. We saw the repercussions of this formation after the early March sell off and subsequent rally. A bottom was created followed by a rally which was unable to break resistance. Finally, a second bottom was formed followed by a higher volume rally which was able to break out through resistance, pushing the markets to new heights.

While the picture my appear similar from a technical vantage point, fundamentally the story is slightly askew. Bond yields continue to creep higher, economic growth is nearly grinding to a halt and pesky inflationary pressures wont seem to let up.

The Dow 06/2007

The S&P, nearly identical.

Same story with the NASDAQ.