Thanks Vets
The Dow finished the week up 70 points while the Nasdaq 100 NDX gained 21. 30 sectors were up and 4 were down. Action for the week was minus 151. After the run up we had and the short term overbought condition the market needed a breather last week. Trends are up and as long as the Bulls find their footing this week we should see another leg up.
The character of the market has changed dramatically over the last few weeks. The Nasdaq 100 NDX is on top of the broad based index ranking with Commodities, Volatility VIX and Interest rates on the bottom. Growth is in the drivers seat and inflation is in the trunk. If we could get Greenspan to go along for the ride and stop raising short term interest rates the economy could really start cooking. If long term interest rates or the Oil Patch climb in overall rank it will be a warning sign for the stock market. The Housing bubble has a life of its own. Hopefully Greenspan does not pop the economy trying to pop this bubble like he did with the Nasdaq in 2001.
Rydex funds- Staged into a long position on the NDX.
Short term - Overbought
INTERMEDIATE TERM TRENDS
NDX, DJIA & SPX Up
INTERMEDIATE OSCILLATOR Oversold Buy April 18th
Internet DOT- The top ranked sector. This sector is all Googley eyed GOOG. Adobe ADBE and Macromedia are also pushing new highs. Talk about growth sectors and they have solid earnings now not just eyeballs.
Insurance KIX- Made it back into the top ten led by Prudential PRU which is making new highs every week. AIG has the headlines but SafeCo SAFC, Unum Providend UNM, Allstate ALL and others have the performance. This sector is probably under owned by institutions and is the only financial sector in the top ten.
Oil Patch XOI, XNG, OSX- Natural Gas bounced out of the bottom ranking and we will see if Oil and Oil Service can do the same. It would probably be better for the market if they did not but the earnings stream is pretty strong.
Brokers XBD- In the bottom of our ranking which needs to change for the stock market to have some more upside as we have never seen a major rally without this sector.
Pharmaceuticals DRG- We said last week this sector was running into some profit taking but was still in the top ten ranking. It has now dropped to 15th or the middle of the pack which means institutions are taking profits and we will too.
As of May 27th:
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About David Shultz
