Spring Forward
The Dow rallied 162 points while the Nasdaq NDX gained 18 points. The Russell RUT
index had the best Action for the week. Market breadth was very positive signalling broad
based participation in the bounce. Sector Action for the week was plus 1664. 28 Sectors
were up while 6 down.
I said last week “we should see some sort of bounce this coming week” and we loaded up
on the Russell index at Rydex at the close Monday taking profits Wednesday. Our Short
term indicators are now in neutral territory allowing the market to fish around a bit for
direction. This coming week will be very telling. Flat to up slightly would be the best longer
term. If we get a sharp rally there are plenty of sellers looking to get out after being under
water since the crashette.
Rydex Alerts- Took profits on part of the bullish Russell funds last week. I will let the
market tell me what to do this coming week taking profits Monday or adding back in for
another step up.
Short term - Neutral
INTERMEDIATE TERM TRENDS- Bearish
INTERMEDIATE OSCILLATOR - Recovered from Extremely low Buy levels last week.
Trends have turned down and Volatility is up.
Do not expect a smooth ride the next few weeks.
Basic Materials XLB- Number one led by Dupont DD, Monsanto MON and
Weyerhaueser WY. The Ultra Basic Materials UYM looks interesting.
Semiconductors SOX - Moved into the top ranks with many of the stocks finding solid
support and positive buying while the rest of the market was taking a tumble. Texas
Instruments TXN, Natl. Semi NSM and KLA Tencor KLAC performed well. We
purchased the new Ultra Bullish ETF USD which participated well without the risk of
being in the wrong stock.
Housing HGX- Fell off in relative rank and entered Bearish territory for the first time in
months. The sub-prime mortgage cloud hangs over this sector. I still own Centex CTX but
will have to sell on any bounce.
Oil Service OSX- Into the top ranks with the rest of the Oil Patch. I will not chase these
stocks as I believe they are still in a trading range. This helps the broad based indices and
is a vote for continued strength in the worldwide economies rather than recession.
Broker Dealer XBD- Stuck in the bottom ranks which does not bode well for the rally. AG
Edwards AGE and Goldman Sachs GS are the leaders. If this sector can move up in
rank I will be more optimistic on the overall market.
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