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The Wilderhill Clean Energy Index looks to have run into resistance at 210, but could bestarting to move higher along with the rest of the energy complex.
Chart Courtesy of StockCharts.com
Crude oil prices are still testing the $65 area.
Chart Courtesy of StockCharts.com
The Philadelphia Oil Service Index (OSX) has remained above 200.
Chart Courtesy of StockCharts.com
The Amex Oil Index (XOI) is now testing its all time highs.
Technical Summary:
Chart Courtesy of StockCharts.com
Seasonally Bullish Period Arrives
The stock market continues to take one step forward and two steps back, and some airpockets are starting to emerge as earnings disappointments are being seen on occasion, butis is the end of the month, meaning that the odds favor the bulls over the next five days.
Pension and mutual fund cash hordes are traditionally put to work at the end of the monthand the first week of a new month, so it is usually not wise to be selling heavily duringthis time period.
The key to success is to remain in strong stocks and ETFs, which at this point favor largecap stocks. See our individual sections for specific ideas.
Stocks moved higher on 4-25, with the Dow Industrials, Transports, and Utilities allmaking new highs together all on big volume, while the Nasdaq and the S & P 500 alsoacted well.
Yet, the two days that followed were sloppy. And with investors starting to fret aboutinflation, a slowing economy, and what the Fed will do next, the potential for volatilityis back on the rise, although positive seasonality may push any downward pressure away fora few days.
Nasdaq, has finally joined the rally and the S & P 500 and the small stocks arekeeping pace, all positives.
It is still a good time to look at individual stocks and to start cutting losses on anylaggards, while taking profits in any big winners, and tightening stops on all positions,while looking at new areas in which to start adding stocks.
For now, the up trend remains intact, but it is getting more and more sluggish with eachunconfirmed new high in the Dow.
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
Selectivity remains the key to success. Look for strength, either on a continued basis, orin turn around areas, such as the semiconductors.
Visit all our individual sections, both our ETF and individual stock picks daily for newideas, and changes to open positions.
Be very methodical about monitoring portfolios, adhering to trading rules, and ratchetingup sell stops is clearly still here.
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
Chart Courtesy of StockCharts.com
With U.S. Gross Domestic Product growing at a 1.2% annual growth rate, and the FederalReserve not being sure about what's next for the economy, some big money players might betaking profits on economically sensitive stocks.
Two examples are U.S. Steel and shares of the CME, two bellwethers for the commodity boomthat has lingered as the Chinese boom and the until recent U.S. housing boom have beendriving up raw material prices.
But, as the economy has weakened, especially housing, shares of CME have been increasinglywobbly, having dropped some 15% since January and now testing their 200 day movingaverage, the line between bull and bear markets, near 510.
U.S. Steel has fared better, as the potential for consolidation in the steel industryremains a key factor holding up share prices in the sector.
Traders, though, should be keeping an eye on CME. A break here could be a subtle, butmeaningful sign of worse things to come.
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The Amex Biotech Index (BTK) continued to show strength. The buyout of Medimmune by AstraZeneca (4-24) should also add some life to the sector.
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The Amex Pharmaceuticals Index (DRG) seems to have bottomed near 340 and is nowchallenging the 370 area.
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The Philadelphia Semiconductor Index (SOX) has also been showing some strength, nowtesting the 500 area.
Chart Courtesy of StockCharts.com
Small stocks are showing some relative strength.
