SectorVue Comments, by David Schultz Options

[TTHQ Staff]

SectorVue weekend comments for Monday February 8th, 2010

Blizzard

The Dow Jones closed down 55 points and the NDX managed a gain of 5 points. The
Russell RUT index is leading the broad based indices. The Institutional index XII got
thrown out with the bath water and is the best indicator of whether the Mutual Funds are
willing to step back in this week.

Sector Action for last week was plus 475 with 11 Sectors up and 24 down. Our Action
number usually precedes market action so a positive Action number last week sets the
stage for a market bounce this week. The Market Barometer topped out on January 8th
and hit a bottom on January 22nd with a series of higher lows since. (see graph on page
4)

Rydex Alerts- Half cash half bullish Russell looking for a bounce.

Short term Trading indicators- Oversold

Market Breadth - Cumulative Market Breadth declined but is now oversold.

INTERMEDIATE TERM TRENDS- Slightly negative

INTERMEDIATE OSCILLATOR - Oversold

Washington DC is socked in with snow. All “nonessential” government employees have the days
off as do the school kids. Note to government -- look to cutback on nonessential employees for
budget savings.
Biotech BTK- Top ranked Sector which is usually good for the Nasdaq and technology in
general. Amgen AMGN pulled back a bit to support. Looking at other possible buys.

Internet DOT/ inx- Back into the top ranks as Apple, AAPL, Google GOOG and Adobe
ADBE stocks found support.

Banks BKX- Still in the top ranks but waning with the most negative Action. This is likely a
good Sector for a ‘pairs’ trade - shorting the weakest and buying the strongest stocks.

Ultra ETF’s- SSO and TWM are very tradeable in this seesaw market.

Technology TXX- Apple AAPL is still the leader and Google GOOG is the bellwether.

Retail RTH- Fell into the lower ranks. Part of this is the normal hangover after holiday
shopping. Part of it is continued unemployment and a slow if non-existent economy.

The hefty drop over the last two weeks took a big bite out of stock portfolios. The
Cumulative Breadth indicator (page 4) is still the best prognosticator of market activity and
is oversold coming into this week so we are looking for a bounce.
SectorVue and Rydex alerts are for educational purposes only and do not constitute 'investment advice'. No
representation is made that strategies will produce a profit.
There is risk of loss in all trading.



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