SectorVue weekend comments for Monday May 20th, 2013
Market Location and Horizon
Dancing on the Ceiling
The Dow Jones rose 235 points while the Nasdaq 100 NDX gained 48 points. The
Russell RUT index moved to the head of the class as the strongest broad based index. It
also includes the most stocks. The Russell RUT, Midcap MID and Nasdaq NDX are
getting a bit overbought.
Sector Action for last week was plus 114 showing some hesitation at new highs with 32
Sectors up and 3 down . Our Market Barometer is overbought but rising and could be
setting up for a blow off top. (see graph on page 2)
Market Breadth - Cumulative Market Breadth is very bullish and making new highs every
week as more stocks are going up than down. ( graph p 4)
Rydex - took profits on bullush Russell on Friday.
IncomeVue portfolio up 20% year to date.
Short term trading indicators - Overbought
INTERMEDIATE TERM TREND- Bullish
INTERMEDIATE OSCILLATOR - Rising
Market partcipation broadened again last week with the Russell RUT small cap and Midcap
MID indices moving to the top. Sector rotation continued with Financial Sectors heading to
the top of the class. Some former winners like Housing HGX, Telecom XTC and Healthcare
IHF are running into profit taking. It is getting very difficult to find new stocks to buy yet it is
equally difficult to take profits when the market goes up every week. Portfolio managers are
getting a ‘deer in the headlights’ feeling. Action is only slightly positive which means the
Bulls are not pressing as hard to the upside.
Email firstname.lastname@example.org for a sample of our high dividend paying stocks.
Broker Dealer XBD- Still tops in overall rank led by retail brokers Legg Mason LM, Wells
Fargo WFC and UBS. Goldman Sachs GS is at break out levels.
Software IGV- Moved up in overall rank and price led by Salesforce CRM. Microsoft
MSFT and CA have been good dividend and total return stocks for us.
Networking NWX- Cisco CSCO was the earnings surprise last week which makes it a
bellwether for the market this week. Will it stall or continue up?
Oil XOI - rallied in rank with Natural Gas XNG, Our Conoco COP is making relative
highs. Gulfport GPOR is a buy for growth and Total TOT is still a nice dividend buy.
Transportation IYT - In our top ranks which is good for Dow theorists. Rails and Airlines
are leading this vote of confidence for the economy.
Biotechs BTK- running into profit taking after some nice gains on possible new cures.
Entertainment PEJ - this sector includes restaurants and casinos. Priceline PCLN and
Panera PNRA are breaking out to new highs.
Gold XAU- Gold bugs are getting smooshed. This Sector is getting oversold.
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