Let it Snow
The Dow fell 120 points while the Nasdaq NDX gained 18 points. The Midcap MID and
Russell indices RUT are still leading the market however Action was negative for each.
Sector Action for the week was minus 485. 22 Sectors were up and while 11 were down.
There may be an end of the month or blow off rally early this week but there is an
undercurrent which could sweep the Bulls off their feet. The Commodities index is very
strong and the Thirty Year bond index has fallen off in the last few weeks envisioning a
stagflation scenario.
Rydex funds- Took profits on the bullish Russell and NDX funds last week and took a small
position in Short Russell fund looking to add to this Monday or Tuesday. Tech sectors have
been strong so there may be a bullish spike in the NDX.
Short term Trading indicator - Failed to break out last week and looks extremely week.
Tradewind is near Bearish territory.
INTERMEDIATE TERM TRENDS Dow, SPX & NDX Flat , MID & RUT -- Bullish
INTERMEDIATE OSCILLATOR - Extremely High Risk levels.
Basic Materials XLB- Number one in overall rank led by Air Products APD, Dupont DD
and Praxair PX. Obviously the economy is doing well.
Entertainment PEJ- Moved up into the top ranks led by Priceline PCLN and Jack in the
Box JBX. We own Carnival Cruise CCL which has not embarked yet.
Utilities UTY- Back up in rank with Texas Utility TXU buyout. Also a defensive play.
Duke DUK is still a buy.
Water PHO - Roper ROP is hitting a new high. PallCorp PLL and Consolidated Water
CWCO. I would love to own some of these on any kind of pullback.
Gold XAU- Moved out of the bottom ranks. I keep accumulating Goldcorp GG.
Semiconductor SOX- Big move up in relative rank led by Marvell MRVL and KLA
Tencor KLAC. The new Ultra bullish Semiconductor ETF USD is the way to play the
sector without having to pick the right stock.
Broker Dealer XBD- In the bottom ranks. An ominous sign for the entire market. We have
never seen a major rally while this sector is in the lower ranks.
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