Chart Courtesy of StockCharts.com
The Wilderhill Clean Energy Index is lagging the traditional energy sector, but may havebottomed out.
Chart Courtesy of StockCharts.com
Crude oil prices are trying to hold above $65, but are not being particularly successful.
Chart Courtesy of StockCharts.com
The Philadelphia Oil Service Index (OSX) broke out to a new all time high on 5-18.
Chart Courtesy of StockCharts.com
The Amex Oil Index (XOI) has also delivered new all time highs recently.
Technical Summary:
Chart Courtesy of StockCharts.com
Low Volume Days Ahead
Summer style trading should be straight ahead, which means low volume, and generally lowvolatility. The only caveat here is the latter, as the potential for politically relatedevents, as well as economic data could move the markets.
Generally, though, Wall Street tradition has been that the big guns are off on vacation,leaving the smaller guns manning the trading desks, and leading to the summer doldrums.
We could still have one more bit of fireworks, though, as the end of the month and the newmonth might bring in some institutional money, and keep prices up for a while.
If that's the case, it could offer some opportunity to take profits, as we head intoDullsville for a while.
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.
Sentiment Summary:
Fear Remains High
Option traders remain bearish. This can be a reason to be bullish, but it can also be awarning sign as the bears can be correct at market turning points.
The CBOE Put/Call closed at 1.05. A consistent string of low readings can be a sign ofexcessive optimism and often signals a top in the markets. Readings below 0.5 are ofconcern, but not as serious as readings below 0.40. Readings above 1.0 are bullish. Thenumbers cited here are meant to be evaluated on a closing basis.
The CBOE P/C ratio for indexes checked in at 2.25. Numbers above 2.0 as the market sellsoff, often lead to rallies. Readings below 0.9 suggest too much bullish sentiment, just asreadings above 2 are usually required to mark major bottoms.
The VIX and VXN had readings of 13.34 and 17.07. A fall near or below 20 on VIX and 30-40on VXN is considered negative, a fact that is usually confirmed when the volatilityindexes begin to rise. Readings above 40 and 50, respectively, are often signs that abottom may be close to developing.
NYSE specialists were neutral in the week ending 5-11, maintaining their reversal of twoweeks of buying. This is the second round of distribution by the insiders after the 3-21bottom. Specialist short selling remained at very low levels, though. Rising short sellingfrom specialists is usually a very bearish sign.
The combination of high put option buying and negative action from NYSE insiders has inthe past been a prelude to trouble for the markets.
Market Vane's Bullish Consensus was at 74% on 5-25 remaining negative. The UBS sentimentindex fell to 74 in April after registering a reading of 103, a downright scary number,and the highest one we've seen in January.
Market Moves
Yahoo Tests Key Support
Yahoo (Nasdaq: YHOO) has had little to cheer about lately, but someone might be buying thestock.
Chart Courtesy of StockCharts.com
Yahoo is one of a few Internet giants that has stood the test of time, and makes money.
The problem for the company, though, is called Google, the 800 pound gorilla that has cutinto Yahoo's business significantly, especially psychologically.
No matter how well Yahoo does, it seems as if Google does better.
Yet, Yahoo's chart is not totally discouraging. For one thing, it has remained above its200 day moving average. And for another, it seems as if volume ticks up slightly everytime the stock dips a bit.
Some would say that is selling. But, to us, it looks as if value players are nibblingevery time the stock gets near the 200 day line.
That's a bullish trading pattern for those who might have some time to wait for things toget better at Yahoo.
Chart Courtesy of StockCharts.com
The Amex Biotech Index (BTK) looks to have found support near the 800 area despite Amgen'sproblems.
Chart Courtesy of StockCharts.com
The Amex Pharmaceuticals Index (DRG) seems to have bottomed near 340 and is nowchallenging the 370 area.
Chart Courtesy of StockCharts.com
The Philadelphia Semiconductor Index (SOX) might have failed on its latest attempt the 500area.
Chart Courtesy of StockCharts.com
Small stocks were starting to show signs of improvement, but fell along with the market on5-24.
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Disclaimer: The financial markets are risky. Investing is risky. Past performance does notguarantee future performance. The foregoing has been prepared solely for informationalpurposes and is not a solicitation, or an offer to buy or sell any security. Opinions arebased on historical research and data believed reliable, but there is no guarantee thatfuture results will be profitable.
