King for a Day
The Dow rallied 160 points while the Nasdaq NDX spiked up 39 points. Interest Rates
TYX are on top of the broad based index list. This is usually a warning light for stocks.
Additionally the Commodities index DJAIG had the best Action for the week - not stocks.
Overall Sector Action for the week was plus 1920 which means stock buyers were
ecstatic. 33 Sectors were up while 1 was down.
Whether it was short covering or chasing momentum stock buyers were jumping for joy
last week and need a rest this week. Despite market indices making new highs in price
our internal numbers are down from May 9th highs. The bond market poses a direct threat
to the stock market. Stock holders will feel like they are playing musical chairs if interest
rates and gasoline prices move up further.
Rydex Alerts- Shorted the Dow Friday adding to a Short Russell position.
Short term - Overbought and buying OEX Puts.
INTERMEDIATE TERM TRENDS- Bullish
INTERMEDIATE OSCILLATOR - Peaked on Weds May 9th. This indicator has been making
lower highs since indicating an intermediate Sell signal is developing if not already in
place.
Water PHO - Number one in overall rank. A fairly defensive sector for obvious reasons -
have you used or drank water today? This is a fairly new sector to follow for most with
unfamiliar names. The ETF itself, PHO, is a good way to participate.
Retail IRH- Rose the most in rank as Walmart WMT announced a share buy-back.
Safeway SWY stock also did well last week. Retail stocks usually rally this time of year.
Oil Patch XOI, XNG, OSX- Slipped in relative rank but holding up in price. $4 a gallon gas
could change the landscape for stocks and the consumer this summer. I think it would
take $2.50 gas and looking lower to spark the consumer.
Consumer CMR- Speaking of the consumer this sector looks a bit tired.
Broker Dealer XBD and Capital Markets KCE - Up nicely in rank with the AG Edwards
AGE takeover. Only this year did the stock trade above the year 2000 high around $58
and merger talk was probably in the works as this stock began to outperform its peers for
the last two months.
Tech and Biotech sectors are generally in our lower ranks. Do not be surprised if the
market hits an air pocket this week.
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This report is for educational purposes only and does not constitute "investment advice".
