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The Wilderhill Clean Energy Index is trying to hold the line at the 180 area, and isshowing some improvement.
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Crude oil prices are closing in on $60.
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The Philadelphia Oil Service Index (OSX) is now testing the resistance near 200.
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The Amex Oil Index (XOI) made a new low on 1-10, but has since bounced back. 1200 is thekey chart point.
Technical Summary:
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Seasonal Push Ends Today
New!! Visit our Large Cap Growth portfolio. Click on the S & P 500 timing and LargeCap Growth link on the left navigation bar.
Wall Street will be tested over the next couple of days as institutional "newmonth" money will decrease, and little economic data is due out this week.
That means that earnings and external events are likely to be the primary movers ofprices. There will be lots of opportunities for the Fed to move prices, though, as theFOMC members will hit the speech trail this week.
From a trading standpoint, little has changed, as individual stocks and sector specificexchange traded funds are the way to approach this market.
Strength is currently with the growth stocks, mostly in the large cap area, although somesmall and midcap stocks are also doing well.
The housing sector continues to act well, and is heavily featured in our Fallen Angelsporftolio.
From a longer term stand point, based on historical trends, this should be a positive yearfor stocks, given the fact that it's the third year of the Presidential Cycle, which callsfor rallies in the third and fourth years of a presidency.
Our long term forecast remains upbeat, unless the major indexes fall convincingly belowtheir 200 day moving averages.
What To Do Now
Focus on strength, but don't fall in love with any particular stock, as news could hit anyposition hard during times such as the current ones.
The rally is starting to broaden, but growth stocks remain at the forefront. visit ourLarge Cap/Growth section for new picks.
The Fallen Angels, with a large focus on the housing sector, is another very useful areaof the site at the current moment.
Energy and gold/metals are also areas showing strength, with the steel sector beingfeatured in our gold section.
Visit all our individual sections, both our ETF and individual stock picks daily for newideas, and changes to open positions.
Still, it pays to be careful in any market. So, be very methodical about monitoringportfolios, adhering to trading rules, and ratcheting up sell stops is clearly still here.
If the market turns south, your chances of preserving your profits by following a soundtrading plan, such as outlined above will increase.
Second guessing decisions, and hoping that things will turn out o.k. in the long haul, isthe recipe for disaster at a time like this in the market.
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:
Options Stay Neutral
Options were neutral at the end of last week, but NYSE insider data, suggests that bigmoney was selling two weeks ago, for the second week running, a sign of caution, if it isnot reversed soon.
Short term sentiment figures in the options market remain fairly bullish, while long termsentiment figures are not so bullish. This mixed picture, is one of the reasons for themarket to be so volatile of late.
The UBS sentiment index, see below, rose to the highest number we can recall in January,setting a very cautionary tone in the market.
The CBOE Put/Call ratio checked in at 0.97. 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 1.67. 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 10.08 and 16.43. 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.
NYSE specialists were fairly heavy sellers of stock on the week of 1-19-07 for the secondweek running. Specialist short selling remained at very low levels, though. Rising shortselling from specialists is usually a very bearish sign.
Market Vane's Bullish Consensus remained at sell signal levels, checking in at 70% 2-2.The UBS sentiment index blasted to 103, a downright scary number, and the highest onewe've seen.
Market Moves
Microsoft's Vista Darkes Stock's Chart
Microsoft (Nasdaq: MSFT) is likely to clean up with sales of its Vista operating system,but Wall Street is using the news to sell the stock.
Chart Courtesy of StockCharts.com
Microsoft is a money printing machine. We have stated this multiple times, and will likelydo so again and again. But, the stock looks to have run out of steam.
This has implications beyond Microsoft's shareholders, as the stock is a member of the DowJones Industrials, the Nasdaq Composite, and the Nasdaq 100 indexes, not to mention manyother technology sector indexes.
Large institutions hold significant blocks of the stock, as do mutual funds.
That means that weakness in the stock will translate to weakness in these indexes, andlikely lead to further selling, as the lemmings pile on.
To be sure, it's early in Vista's tenure, as the sales campaign has just started, and thebuzz, negative or positive, has yet to build.
But the stock failed to rally last week, despite a generally upbeat market after the Fed'sannouncement. And the 50 day moving average, near 30, is looming as a test of the stock'ssponsorship.
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The Amex Biotech Index (BTK) is still in play. The 780-800 area is important resistance.
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The Amex Pharmaceuticals Index (DRG) is starting to show some strength.
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The Philadelphia Semiconductor Index (SOX) has broken down after failing to break above480.
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Small stocks made new all time highs on 1-31, and moved higher on 2-1.
