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The Dow rallied 158 points while the Nasdaq NDX gained 59 points leading the pack.
Action for the shortened week was plus 1641. 26 Sectors were up while 8 were down.
Volatility VIX declined as the Nasdaq NDX rallied. Commodities DJAIG are in a fairly
steep down trend negating inflation fears.
Our Short term trading indicators are very overbought. Normally we would be shorting
however the upcoming expiration week combined with the start of earnings season is
normally Bullish. For this week we expect pullbacks will be purchased as many investors
were caught flat footed in last weeks rally.
Rydex funds- Cash. Banked a 4% profit on last weeks rally.
Short term - Overbought. We will see if the buyers show up on any pullback.
Market breadth is the key factor
this week.
INTERMEDIATE TERM TRENDS - SPX, NDX, Dow & SML -- Flat
INTERMEDIATE OSCILLATOR - Neutral
Overdue to enter Bearish territory however last week produced a definitive up turn.
Broker Dealer XBD- Number one in overall rank cheering for their own cause. Most of
these stocks ran up to relative highs last week. We’ll see if the customers can catch up.
Technology TXX- Still moving up in rank on the strength of Microsoft MSFT, Apple
AAPL and Cisco CSCO. Yahoo YHOO continued its surge last week.
Airline XAL- Taking off with lower fuel costs and full planes. JetBlue JBLU and
American AMR have been the leaders. We would like to see the rest of the
Transportation sector hop on board.
Entertainment PEJ- Lower gas prices means more money to eat out. California Pizza
Kitchen CPKI and Dominos Pizza DPZ are the leaders in this sector.
Oil Patch XNG, OSX, XOI - Found some support late last week as oil settles in at $53 bbl.
$50 is the obvious next round number that would boost stocks benefiting from fuel
savings. Remember the oil patch is a large component of indexes like the S&P500 putting
a damper on the ‘market’ outlook.
China CZH- Topped out last week. Many of these stocks are at relative highs and taking
profits is timely.
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