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The Wilderhill Clean Energy index delivered a break out.
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The Philadelphia Oil Service Index (OSX) is testing its all time highs, but is struggling.
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The Amex Oil Index (XOI) made an all time high as well recently, and is again trying tomove back up to the top of its recent trading range.
TechnicalSummary:
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Low Volume Raises Questions About Rally
Last week's performance in the stock market raised more questions than it answered, as lowvolume plagued the rally, especially Friday's run to new highs by the Dow JonesIndustrials, Transports, the Russell 2000, and the S & P 500.
The big question is whether it was good enough. To be sure, the NYSE advance-decline linemade a marginal new high on a weekly basis, but fell short on a daily basis, although itcame very close.
The number of stocks making new 52 week highs was decent, but not overwhelming.
The Nasdaq and the Nasdaq 100 again sta out the new highs parade.
Now, comes the Federal Reserve, which meets on Tuesday, and the inevitable statement afterwhat is likely to be yet another rate hike.
If the market does not like what the Fed says, anything is possible.
So the rally showed some improvement, and is on slightly more solid footing than it was aweek earlier, although, there was no technical slam dunk.
In other words, this is now a moderate rally.
Key technical levels, the Nasdaq 2350and S & P 500 1300 remain key measures of success.
Commodities Are Mixed
Gold remained above $600 even as the U.S. Dollar weakened
June crude remained below $74, with $75 offering resistance, as traders await the supplydata release from the Energy Information Agency.
Check our energy section for bond, gold, dollar, and currency recommendations.
What To Do Now
Traders should remain cautions, and should be holding onto some cash now, only buyingstocks that are showing exeptional characteristics, while looking at potential short salecandidates.
Investors should be evaluating their portfolios carefully and consider taking profits inlong held positions with significant profits.
It's still a good time to be careful, and to continue concentrating on strength, as themarket is starting to weaken.
It's also time to look at the technology sector once again, as the signs suggest thatmoney is moving in that direction. But there should be no hurry to do so during thisvolatility.
Remember, our Fallen Angels portfolio is designed for those with a longer term time frame,and offers both long and short recommendations.
Check all our sections daily. See tech, biotech, Fallen Angels, and timing systems forthe latest adjustments. Our ETF trading systems for energy, Spyders, Small Caps, andtechnology have also been updated.
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Sentiment Summary:
Back To Neutral
Option traders got happy on Thursday, but returned to neutral on Friday.
Healthy advances rise on the back of worry warts who buy put options when the marketfalls. When the market falls and put option buyers are absent, it is often a sign thatmore selling is coming.
The CBOE Put/Call ratio checked in at 0.72, rising slightly. A consistent string of lowreadings can be a sign of excessive optimism and often signals a top in the markets.Readings below 0.5 are of concern, but not as serious as readings below 0.40. Readingsabove 1.0 are bullish. The numbers cited here are meant to be evaluated on a closingbasis.
The CBOE P/C ratio for indexes checked in at 1.72, rising but still below the recent highof 1.95. Numbers above 2.0 as the market sells off, often lead to rallies. Readings below0.9 suggest too much bullish sentiment, just as readings above 2 are usually required tomark major bottoms.
The VIX and VXN had readings of 11.62 and 14.43, falling slightly. When these indexesbegin to rise, it is a sign of concern as rising volatility indexes suggest that anacceleration of the prevalent trend is on its way. A fall near or below 20 on VIX and30-40 on VXN is considered negative, a fact that is usually confirmed when the volatilityindexes begin to rise. Readings above 40 and 50, respectively, are often signs that abottom may be close to developing.
The Duarte Overbought-Oversold gauge rose to 60%, moving back to neutral. Readings of 80are overbought and 40 and below are oversold.
NYSE insiders were buyers of stock for the week of 4-14-06. NYSE insider short sales arestill at very low levels. When NYSE specialists raise their short sales, and sell stocks,risk increases dramatically. There is a two week lag for these figures.
Market Vane's Bullish Consensus checked in at 69%, but gave a sell signal of 70% the priorweek. It correctly called the rally in October with a reading of 47.
Market Moves
CME: $500..A Date With Destiny
The Chicago Mercantile Exchange (NYSE: CME) has a date with destiny, the $500 area.
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The price action in the shares of the Chicago Mercantile Exchange have been excellentpredictors of the price of commodities, especially gold and oil, which are not its biggersources of business, but trade on the exchange indirectly through agreements with theNYMEX.
Still, the general trend has held up, as CME has moved steadily higher.
Now comes a big test, as shares ar nearing the $500 area.
As with Google, which ran into a wall of sellers at $475, this could be a big test forCME, and the repercussions for the commodity bull market could be significant.
Traders have been betting that the commodity bull market will continue to fuel tradingactivity at the CME, and have been bidding up the shares.
The Federal Reserve has been raising interest rates.
Recent economic data suggests that the U.S. economy, although still growing, may havestarted to slow down. Certainly the housing market has slowed, along with the automobilemanufacturing sector.
Much of the demand for commodities, though, is coming from China, and the growth theredoes not seem as if it will slow without some kind of external event triggering it.
CME ran up to $500 in April and failed to break out above the key round number, but looksto be readyin for another go at the key round number area.
Gold and oil are also starting to show some backing and filling, as has been copper oflate. Grains are also showing signs of consolidation.
If these and other commodities, start to show increasing signs of weakness, look to CMEshares for further clues.
Much may develop after the Federal Reserve releases its statement after the upcoming FOMCmeeting.
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The Amex Biotech Index (BTK) might have made a major bottom, but is still struggling torise above $700.
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The Amex Pharmaceuticals Index (DRG) is showing some signs of improvement. 330-340 is keyresistance.
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The Philadelphia Semiconductor Index (SOX) is still testing 520. 550 is long termresistance. 500 is key support.
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Small stocks have been showing some strength of late, making new highs.
© Copyright 1996-2006, Kollar Market Analytics, Inc., AllRights Reserved.
Disclaimer: The financial markets are risky. Investing is risky. Past performance does notguarantee future performance. The foregoing has been prepared solely for informationalpurposes and is not a solicitation, or an offer to buy or sell any security. Opinions arebased on historical research and data believed reliable, but there is no guarantee thatfuture results will be profitable.
