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The Wilderhill Clean Energy Index is trying to fomr a bottom, but is not showing muchstrength these days.
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The Philadelphia Oil Service Index (OSX) is still testing the 200 area, and its 200 daymoving average.
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The Amex Oil Index (XOI) has retained an upward bias.
TechnicalSummary:
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Near Major Up Side Reversal
Stocks rallied enough to bring some key technical gauges near positive reversals.
One key gauge is the NYSE advance decline line, which is about one good day from making anew short term high, qualifiying it as a confirmation of last week's rally.
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The NYSE AD line picture, above, shows how close the indicator is to a new high.
Overall, last week's rally looked real enough to turn us cautiously bullish, as we waitfor the next set of shoes to drop.
Sticking with strength, and following sound sell rules, should keep us out of trouble.
The most encouraging part of the rally, sofar, is the participation of financial and technology stocks, the traditional leadershipin the market.
The S & P 500, finally closed well above 1280, and is now testing the 1300 area.
Large drug stocks have also acted fairly well.
Oil And Natural Gas In Focus
Natural gas is below the $7 area.
Crude oil fell last week but held above $70.
Gold is still trading inside the $600-$675 area, with prices responding to news reportsfrom Israel, but also responding to economic news.
Check our energy section for bond, gold, dollar, and currency recommendations.
What To Do Now
See all our sections for new recommendations.
It's a good time to look into technology and financial stocks along with large drugstocks.
The bond market remains interesting. See our bond trading model, on our energy page.
There are some interesting stocks in the health care and energy areas, as well as ourFallen Angels portfolio.
Our ETF trading systems have been adjusted with our utility trading model finally gettinga wake up call. See the energy section for details.
Remember, our Fallen Angels portfolio is designed for those seeking a potentiallydiversified portfolio with a longer term time frame, and offers both long and shortrecommendations.
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:
Steady Sentiment Remains
Option traders remained fairly quiet on 8-18, although it was an options expiration week.
In the market's current situation, a little quiet is a good thing.
The CBOE Put/Call ratio checked in at 0.89. A consistent string of low readings can be asign of excessive optimism and often signals a top in the markets. Readings below 0.5 areof concern, but not as serious as readings below 0.40. Readings above 1.0 are bullish. Thenumbers cited here are meant to be evaluated on a closing basis.
The CBOE P/C ratio for indexes checked in at 1.31. Numbers above 2.0 as the market sellsoff, often lead to rallies. Readings below 0.9 suggest too much bullish sentiment, just asreadings above 2 are usually required to mark major bottoms.
The VIX and VXN had readings of 11.64 and 18.45. These two indicators have been fallinglately. A fall near or below 20 on VIX and 30-40 on VXN is considered negative, a factthat is usually confirmed when the volatility indexes begin to rise. Readings above 40 and50, respectively, are often signs that a bottom may be close to developing.
The Duarte Overbought-Oversold Gauge (DOOG) remained at 37.5. This remains a bullishreading.
NYSE insiders were buyers of stocks for the week of 7-21-06. 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 rose to 64% on on 8-18-06, again remaining neutral afterseveral consecutive sell signal levels. This indicator has been calling for a pullback instocks for several weeks. Buy signals occurr when the indicator falls to 40% or less.
Market Moves
Exxon And Occidental Remain In Bullish Chart Patterns
Oil prices have been quite volatile of late. But Exxon Mobil and Occidental Petroleumremain near their recent highs.
Chart Courtesy of StockCharts.com
Those who remain bullish on oil prices may be getting support from the price action inExxon Mobil and Occidental Petroleum.
Exxon, a stock that lagged the rally in oil for several years has been holding up quitewell lately, finally living up to the huge earnings that the company has posted.
OXY, though, is a different story. This stock has done well throughout the entire rally inoil.
The fact that Exxon is holding up, as OXY is also holding up suggests that largeinstitutions remain confident in the overall trend for oil prices.
Overall, it seems that as long as crude prices remain above $65 per barrel, these two oilstocks are likely to hold up.
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The Amex Biotech Index (BTK) remains volatile and has lagged the current market. 650 istough resistance with 620 near term support.
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The Amex Pharmaceuticals Index (DRG) again closed above 340, but is consolidating.
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The Philadelphia Semiconductor Index (SOX) has been in rally mode and has delivered aclose above 440.
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Small stocks are keeping pace with the current advance.
© Copyright 1996-2006, Kollar Market Analytics, Inc., AllRights Reserved.
Disclaimer: The financial markets are risky. Investing isrisky. Past performance does not guarantee future performance. The foregoing has beenprepared solely for informational purposes and is not a solicitation, or an offer to buyor sell any security. Opinions are based on historical research and data believedreliable, but there is no guarantee that future results will be profitable.
