Chart Courtesy of StockCharts.com
The Wilderhill Clean Energy Index continues to form a bottom.
Chart Courtesy of StockCharts.com
The Philadelphia Oil Service Index (OSX) seems to have broken down with 200 being animportant level to keep an eye on.
Chart Courtesy of StockCharts.com
The Amex Oil Index (XOI) has also broken down, and is now trading well below its 200 daymoving average.
Technical Summary:
Chart Courtesy of StockCharts.com
Steady Action Prevails
Last week's market was quite stable, despite, or perhaps because of options expiration.This week, traders will face new sets of economic data and a Federal Reserve Open MarketCommittee meeting.
Still, the NYSE advance decline line, which has been a very reliable indicator of late,continues to point toward higher prices, as does the steadily improving number of stocksmaking new highs on the NYSE.
The money flows continue to leave energy related areas, and seem to be moving intofinancial and technology stocks, considered more traditional market leadership.
Small stocks are also starting to catch up, at least in their trend, to the S & P 500,which has led the rally for the last few weeks.
Volume and breadth trends are positive, although not overwhelmingly so. And the market hashad its share of down days along the way.
Overall, though, the overall trend, as of the end of last week seemed toward higherprices.
Commodities Weakened Further
Commodities are increasingly weak, as well as oversold, which means that a bounce, or evena counter trend rally is likely at any time.
The key is whether any such rallies, if and when they materialize, will have stayingpower.
Natural gas for December is now trading well below $8, having lost over $2 in the last fewdays.
Crude oil for December is trading below the $65-68 area, and could test the $60 area inthe near term.
Gold is now testing the $580 level, and remains weak.
Check our energy section for bond, gold, dollar, and currency recommendations.
What To Do Now
Work within the premise that strong stocks are worth owning, at least on a trading basis.
Slow and steady position building remains the key to success. Look for opportunities infinancial and technology stocks.
Visit our technology and Fallen Angels areas for trading ideas everyday.
Active traders should have some open short positions in energy. See our energy section fordetails.
Stay patient, and see if the market can continue to right itself. See all our sections fordetails on new potential picks.
The bond market remains interesting. See our bond trading model, on our energy page.
Our ETF trading systems have been adjustedto reflect the current trends in the market.
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.
Chart Courtesy of StockCharts.com
Sentiment Summary:
No Sell Signal Yet
Option traders remain calm, but not overly optimistic, suggesting that this market canstill go higher.
The CBOE Put/Call ratio checked in at 0.82. 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 1.26. 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 11.76. and 17.75. A fall near or below 20 on VIX and 30-40on 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 (DOOG) rose to 55. This remains a neutral reading,and an improvement over last week's 47.5.
NYSE insiders were buyers of stock for the week of 9-1-06. 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 68% on on 9-15-06, closing in on the 70% area,whihc is a sell signal.
Market Moves
Microsoft And Intel Could Fuel More QQQQ Gains
The Nasdaq 100 Trust (Nasdaq: QQQQ) is moving higher behind improving performances fromMicrosoft (Nasdaq: MSFT) and Intel (Nasdaq: INTC).
Chart Courtesy of StockCharts.com
Microsoft has been moving steadily higher, most recently by the announcement of a wirelessdevice for music downloading and sharing to take on Apple's IPOD.
The stock crossed above its 200 day moving average in July and formed a base above the keysupport level, before rising on the news of the new device over the last few days.
There is major resistance at the 28-30 area, but a clear path to 35 if the stock can moveabove the key resistance band, as seems possible if the Nasdaq's momentum continues.
Intel, is another potentially big winner if the technology sector continues to attractmoney, althought this tech giant has had a difficult time rising above 20.
If Intel and Microsoft, along with other large tech names regain their lost followers, wecould see major gains over the next several months.
Chart Courtesy of StockCharts.com
Chart Courtesy of StockCharts.com
Chart Courtesy of StockCharts.com
Small stocks are moving along with the market.
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