This U.S. Stock Market Is Not Dealing in Reality as It Moves Higher

NEW YORK (TheStreet) -- The U.S. stock market finished the second quarter of trading in mixed fashion. The DJIA was down 25.24 points to finish at 16826.60 while the S&P 500 was down fractionally at 1960.23. The Nasdaq closed higher by 10.25 at 4408.18 and the Russell 2000 was higher by 3.46 to finish at 1192.96.

The stock indexes are once again out of sync. The DJIA is now in oversold territory while the Nasdaq is in overbought territory. This is all according to my internal algorithm process.

Having the DJIA oversold and the Nasdaq overbought makes for a fantastic paired trade; short the Nasdaq while going long the DJIA. Keep an eye open for the rotation away from the tech-heavy Nasdaq and into the slow growth, inflation accelerating stocks.

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At the end of trading last Friday, American purchasing power (U.S. Dollar) was down for the second consecutive week after the Federal Reserve devalued at the June meeting. On Monday, the burning of the dollar continued.

The Select Sector Consumer Discretionary ETF (XLY) is down 0.1% for the year to date while the Select Sector Utilities ETF (XLU) is up 16.6% YTD.

Food was up 1.5% last week and up 23.5% YTD and cattle was up 3.6% last week and 25.9% YTD. That is called inflation accelerating but do not tell the Fed.

Gold was up for the fourth straight week last week and up over 10% YTD.

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