See Saw Summer
The Dow slipped 59 points while the Nasdaq NDX got hammered losing 41 points in the
short week. Action for the week was minus 665. 8 sectors were up while 24 were down.
More sectors are in up trends after the market found bottom a few weeks ago however
they are defensive sectors. Blue Chip broad based indices like the S&P500 or
Institutional index XII have found support in a flight to quality. Growth indices like Small
Cap SML or Nasdaq 100 NDX are still in down trends and under-performing.
It is unfortunate Bernanke is fighting the inflation ghost and killing much needed growth in
the process. The best hope now is for lower oil prices and/or some slow economic reports
telling the FOMC to stop the insanity.
Rydex funds- Cash
Short term - Neutral
INTERMEDIATE TERM TRENDS
SPX- Up, Dow- Up & NDX - Down
INTERMEDIATE OSCILLATOR
Oversold Buy June 13th
REIT’s NLR- Number one this week benefitting from high dividends, strong earnings and
possible inflation hedge. Frankly Bonds look better than Real Estate at this point as the
boom is over and the economy is slowing.
Oil Patch XOI, XNG, OSX- While oil has hovered above $70 bbl the stocks have been
unable to make new highs even with takeover speculation. We would take profits on oil
patch holdings and expect huge selling if the price per barrel drops below $68 bbl.
Transportation IYT- The opposite side of the oil patch coin. Ryder R, Continental Air
CAL and American Airlines AMR are hitting relative highs. This is the most optimistic
market indicator right now.
Banking BKX- Finding support. Mortgage bankers Wells Fargo WFC and Washington
Mutual WM are at relative highs while BBT and State Street STT are at relative lows.
Sounds like a good trade to me - Sell high and Buy low.
Technology TXX- Buried in the bottom rankings with supply and pricing issues. Bernanke
took the punch bowl away before anyone had a sip of success.
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