The Rhodes Report

11/4/2011:   Quite simply, the past 5-week rally has been breathtaking, but it remains to be seen whether it has legs of whether it does not. It is of our opinion, that it does have legs, and it does so given the Financials (XLF) are rallying, but more importantly, the Homebuilders (XHB) are leading the rally. And, we think the XHB shall continue leading and actually do better than anyone anticipates at this juncture.

The head & shoulders bottom on the weekly chart is very clear; although it is not yet confirmed. However, the 30-week moving average is on the verge of being given, with the 20-week stochastic turning higher through its trigger point. Again, in the past, this has resulted in a sustained rally, and if neckline resistance is violated as we believe it shall be, then targets in the range of $27.50 to $37.50 come into view. This is certainly not the consensus view, but as they say: every dog has its day.

Good luck and good trading, Richard Rhodes

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About The Rhodes Capital:  Rhodes Capital Management is a Registered Investment Advisor in the Commonwealth of Pennsylvania; and provides active investment management services for Individually Managed Accounts.

Richard Rhodes is Editor/Publisher of two daily trading reports: The Rhodes Report and the ETF Playbook. His private trading experience spans the course of 25-years - including stock, options and futures trading. These newsletters are a combination of fundamental and technical analysis; whose focus is to capitalize on the short and intermediate term developments in the world capital markets. Specific individual stock and ETF recommendations are made in each publication.

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