Lion or Lamb ?
The Dow rallied 205 points and the Nasdaq NDX gained 21 points in the shortened week.
The Nasdaq 100 index NDX had the best Action for the week while the Commodities
index DJAIG had negative action. Overall Sector Action for the week was plus 548. 32
Sectors were up while 2 were down.
After the crashette in February I said the market would rally to ‘middle ground’ which it
has. This week we will see if the market can get out of the box and flirt with six month
highs. With Oil XOI on top and Broker Dealer XBD in the bottom ranks the sector rotation
need is obvious - they need to switch places or at least meet in the middle. Tech sectors
also need to show a little more relative strength.
Rydex Alerts- Took profits on Bullish Russell last week not wanting to hold over the long
weekend while our Short term indicator is overbought.
Short term - Overbought. The S&P index has not broken out but looks like it will try Monday
morning after a favorable jobs report Friday. Market breadth has been positive and
instrumental to the Bulls.
INTERMEDIATE TERM TRENDS- Flat to Bullish
INTERMEDIATE OSCILLATOR - Bullish territory. This week is break out or break down time.
Oil XOI- Number one but overbought with negative action as the price rallied last week.
Time to take profits in the Oil Patch.
Service GSV - The top performing technology sector.
Biotech BTK- Made it into the top ranks. Our Affymetrix AFFY position is up nearly 20%.
Biotech can lead the Nasdaq if Semis or Networking join in.
Basic Materials XLB- Falling in relative rank which would relieve some inflation
pressures. Take profits in Chemicals like Dupont DD and Dow. Monsanto MON has had
a nice run as well.
Gold XAU- pretty big swings over the last year. I would like to see this sector make it into
the top ranks but plan on taking profits in our Goldcorp GG holding soon.
Semiconductor SOX- Sneaking up in relative rank. I still like the bullish Ultra
Semiconductor ETF USD as one stop shopping.
Water PHO- Fell the most in relative rank. Still getting accustomed to this relatively new
ETF and Sector. Take profits if you do own some of the stocks. Many are European.
Financials XBD, KCE- Still in the bottom of the heap. It is doubtful the market can make
substantial gains without these sectors participating.
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