Treading Water
The Dow gained 10 points while the Nasdaq NDX gained 22 points on good earnings reports. 26 sectors were up and 8 were down. Action for the week was plus 118. Not the kind of action needed to break out to new highs.
Earnings are good but price action is not that enthusiastic. Many of the stocks like IBM ran up before the good earnings report and did not advance afterwards. Selected stocks are doing well but it is hard to imagine the broad market averages making new highs when big components like Intel, Microsoft and IBM are not. Biotech and Semiconductor are in the top ranks but ran into some profit taking last week and the Oil Patch is nudging its way back up leaving less room for growth sectors to lead.
Rydex funds- currently long the SP500 but flipping back and forth with the market. Trends are up but Oscillators are overbought which means treading water for awhile.
Short term - Overbought Sell
INTERMEDIATE TERM TRENDS
NDX, DJIA, SPX -- Up
INTERMEDIATE OSCILLATOR
Overbought Sell July 13th
So far the market has been able to mark time.
I would be surprised if there are not some air pockets and down days this week.
China CZH- The leading sector with the Yuan revaluation last week led by PetroChina
PTR. I would let the dust settle on these stocks before jumping in at relative highs.
Transportation IYT- Made a nice move upward in relative rank and price as airlines and railroads rallied. It appears they are getting used to the high cost of fuel and are able to pass along some of these costs to consumers.
Oil Service OSX - Moved back into the top ten with many of the stocks hitting new highs on stellar earnings reports. We definitely took profits on BJ Services BJS too early but are not about to chase this move as the Mutual Funds feel they must.
Broker Dealer XBD- Still in the top ten ranking but just barely. If this sector does fall out of the top ten it will be an additional warning signal the market is do for a pause or at least is not ready to make new highs.
Defense DFI- This steady eddie sector is plugging along with long term contracts and built in profit margins. We don’t hear anyone talking about this sector so it still may be under owned. Lockheed LMT, Alliance Tech ATK, L-3 LLL and General Dynamics GD are the leaders.
Gold XAU- Perked up last week but is still in the bottom of our rankings. Not glittering yet!!
SUBSCRIPTION INFO
A sample copy of the entire SectorVue newsletter via email may be obtained by
calling 703/242 1076 or email sectorvue@cox.net . Requests for a sample
fax must include full name and voice phone number. Subscriptions are $500 per
quarter for individuals $750 per quarter for offices. Rydex alerts priced separately.
This report is for educational purposes only and do not constitute "investment advice".
