Hi Mom
The Dow finished the week up 153 points and the Nasdaq 100 NDX gained 35. Overall 31 sectors were up and 3 were down. Action for the week was plus 1200. Making this the third week in a row with positive Action. It also brings our Action Oscillator into overbought territory along with our Short term market indicators. We have said several times the most bullish scenario is a quiet week which is very much overdue after a volotile April. While the S&P 500 was only down 1% in April the average Mutual Fund was down more than 4%. This pretty much pegs Mutual Fund managers as trend followers and also points out who the patsy is at the poker table.
The FOMC meeting Tuesday came out as expected with measured language regarding inflation and interest rates. The biggest news in the financial markets last week was on the long end of the yield curve when the Treasury announced the may reintroduce the 30 year bounds causing the current bonds to crater. We will see if the Housing markets feel any pain over the next few weeks as loans tied to short and long term interest rates got a kick in the teeth last week.
Rydex funds- Took a nice 4% plus profit in the bullish NDX fund and nibbled at a short position in the same as we are very overbought short term. Longer term trends are still bearish.
Short term - Overbought
INTERMEDIATE TERM TRENDS
NDX & SPX Down
INTERMEDIATE OSCILLATOR
Oversold Buy April 18th
Pharmaceutical DRG- The top ranked sector once again led by our Wyeth WYE holding and Sanofi Aventis SNY. This normally defensive sector was out of favor until March but has caught up quickly. An aging world population is the fuel for this fire.
Oil Service OSX- Bounced back up last week even as Oil and Natural Gas slipped in overall rank. While we feel oil will settle in at less than $50 per bbl the earnings should continue for the oil patch making these stocks buys on dips. We own BJ Services BJS.
Internet DOT- A former high flier makes it into the top ten although the theme is healthcare related as WebMD HLTH is the leading stock. Google GOOG stock makes the headlines. Time Warner TWX has been dead money for some time.
Housing HGX- Slipped again in overall rank. While earnings have been stellar over the last year the stocks have not been able to make new highs for the last six months and continue to test recent lows. The housing bubble is really a cheap mortgage bubble which may be in danger after last weeks bond market decline.
Gaming SGV- Led by Argosy Gaming AGY and our Boyd Gaming BYD holding these are real businesses not just a roll of the dice and probably under owned by institutional and individual investors. One of the benefits of tracking sectors is to be led to a winning sector you would otherwise ignore.
| as of May 6th, 2005 | ||||||
| Broad Based | Symbol | Close | Wkly chg | %Ovrb/s | ||
| Dow Commodities | &AIG | 151.32 | -0.97 | -22 | ||
| Dow Jones Industrial | DJIA | 10345.4 | 152.89 | -26 | ||
| Midcap | MID | 647.25 | 14.49 | -21 | ||
| Nasdaq 100 | NDX | 1456.00 | 35.21 | -23 | ||
| SP 100 | OEX | 558.20 | 5.46 | -23 | ||
| Small Cap | SML | 312.22 | 9.14 | -32 | ||
| SP 500 | SPX | 1171.35 | 14.50 | -20 | ||
| Thirty Year Rate | TYX | 46.34 | 1.15 | -6 | ||
| Volatility | VIX | 13.98 | -1.33 | 15 | ||
| Institutional | XII | 579.79 | 6.04 | -21 | ||
| Rank | Sectors | Chg Rank | Symbol | Close | Wkly Chg | %Ovrb/s |
| 1 | Pharmaceutical | 1 | DRG | 333.77 | 2.35 | 59 |
| 2 | Biotech | 2 | BTK | 526.75 | 17.68 | 48 |
| 3 | REIT | 0 | NLR | 119.16 | 0.32 | 41 |
| 4 | Utility | -3 | UTY | 401.64 | -4.39 | 39 |
| 5 | Defense Industry | 2 | DFI | 911.33 | 18.33 | 22 |
| 6 | Insurance | 3 | KIX | 136.40 | 5.14 | 22 |
| 7 | Dividend Yield | 3 | DVY | 60.35 | 0.80 | 1 |
| 8 | Internet | 13 | DOT | 184.93 | 6.89 | -4 |
| 9 | Gaming | 13 | SGV | 146.79 | 5.59 | -4 |
| 10 | Oil | -5 | XOI | 829.73 | 13.06 | -7 |
| 11 | Natural Gas | -5 | XNG | 316.67 | 4.30 | -8 |
| 12 | Banking | -4 | BKX | 97.69 | 0.30 | -9 |
| 13 | Consumer | -1 | CMR | 580.36 | 5.14 | -9 |
| 14 | Wireless | 0 | WMH | 53.76 | 0.77 | -9 |
| 15 | Housing | -2 | HGX | 477.96 | 12.29 | -11 |
| 16 | Computer | 2 | XCI | 665.43 | 13.26 | -21 |
| 17 | Investment Mgmt | -2 | SMQ | 411.15 | 6.71 | -25 |
| 18 | Transportation | 2 | IYT | 63.43 | 1.82 | -25 |
| 19 | Basic Materials | 0 | XLB | 28.76 | 0.75 | -29 |
| 20 | Oil Service | 5 | OSX | 133.03 | 4.11 | -30 |
| 21 | Airline | 3 | XAL | 46.27 | 1.10 | -31 |
| 22 | Broker/Dealer | 4 | XBD | 140.24 | 2.82 | -32 |
| 23 | Semiconductor | 0 | SOX | 396.82 | 11.17 | -32 |
| 24 | China | -13 | CZH | 95.63 | -0.13 | -34 |
| 25 | Computer Software | 2 | GSO | 151.91 | 3.43 | -34 |
| 26 | Service | 2 | GSV | 128.12 | 1.49 | -35 |
| 27 | Networking | -10 | NWX | 197.59 | 2.19 | -36 |
| 28 | Retail | 3 | IRH | 90.09 | 2.64 | -37 |
| 29 | Telecom | -13 | XTC | 655.25 | 2.70 | -37 |
| 30 | Technology | -1 | TXX | 549.42 | 10.33 | -38 |
| 31 | Cyclical | -1 | CYC | 713.33 | 15.89 | -39 |
| 32 | Cable | 2 | SCQ | 322.42 | 6.72 | -45 |
| 33 | Gold/Silver | -1 | XAU | 85.67 | 2.16 | -47 |
| 34 | Disk Drive | -1 | DDX | 98.96 | -0.11 | -60 |
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