Lunar Eclipse
The Dow fell 533 points while the Nasdaq NDX lost 113 points. Volatility VIX and Commodities DJAIG
jumped up to the top of the Broad based ranks. The Institutional index XII and S&P100 are very oversold.
Sector Action for the week was minus 3341. All Sectors were down.
I have said the last few weeks Market risk was high and last week was a good example of what happens
when investors hit the brakes after being on cruise control for months. Watching Asian markets overnight
makes for bad dreams and the morning hangovers have had a very negative effect on US markets. It is hard to get an afternoon rally to stick when traders want to be flat or short for the next morning. Our market risk numbers have been foretelling the neccesity of this kind of pullback for a few weeks now which is why we own few stocks and have been buying Puts or Bearish funds. We should see some sort of bounce this coming week.
Rydex Alerts- Took profits on the bearish Russell funds last week and took a small
position in Bullish Russell fund looking to add to this when market breadth decides to
come up for a breather. Rydex Alerts are up 12.05% as of the end of February.
Short term - Oversold waiting for positive breadth
INTERMEDIATE TERM TRENDS Dow, SPX & NDX Flat to Bearish , MID & RUT -- Bullish
INTERMEDIATE OSCILLATOR - Last week we said “Extremely High Risk levels”
This indicator is now in Bearish territory and usually spends a few Months there.
Utility UTY- Number one as a defensive play and a strong likelihood interest rates will not be going up any
time soon.
Housing HGX- Moved back into the top ranks led by Vulcan Materials VMC, Temple Inland TIN and
Office Max OMX. We own Centex CTX.
Oil Service OSX- Into the top ranks with led by Cooper Cameron CAM and Baker Hughes BHI. I already
took profits on CAM so will look at this sector on pullbacks.
Water PHO - PallCorp PLL managed to gain last week. I will be bottom fishing in this sector soon.
Consumer CMR- Moved up a bit in rank. Colgate CL, Mcdonalds MCD and Merck MRK are the buys.
Ultra ETF is UGE
Technology TXX- Took it on the chin however it is good to keep an eye on the stronger stocks like
Computer Assoc. CA, Parametric Tech PMTC and PALM. Google GOOG will be a buy too.
Ultra ETFs- Bullish and Bearish newly listed on the AMEX should come in handy with current market
volatility. Pure risk and reward with these. QiD and QLD for the Nasdaq, SDS and SSO for the S&P500.
SUBSCRIPTION INFO
A sample copy of the entire SectorVue newsletter via email may be obtained emailing sectorvue@cox.net .
Requests for a sample fax must include full name and voice phone number. Subscriptions are $500 per
quarter for individuals $1000 per quarter for offices. Rydex alerts priced separately.
This report is for educational purposes only and does not constitute "investment advice".
