Aesop's Fables

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Well, well, well. We fell off our diet and succumbed to lunch at the “21” Club after all. NASDAQ was the tortoise that finished the race the strongest after the Dow (DIA), our hare, started the ball rolling. Plus, NASDAQ returned over the 50 DMA to get back to an unconfirmed bullish phase-we need one more day for confirmation.

Concerning volume, SPY, DIA, QQQ all managed an Accumulation day in volume which acts as a welcome relief to the surging volume we saw on the downside earlier. The holdout on big volume (or big enough) was the small caps (IWM).

But the story began with the DIA or Dow, once it made a new 60+ day low, then gapped above the 200 DMA the next day and didn’t look back.

Now that 2014 is the Year of the Galloping Horse, with 100 or more point swings in the market either way becoming the norm, we look to next week as time for certain sectors all still in negative phases to catch up-Retail, Semiconductors, Financials, or, NASDAQ (and Biotechnology-in the world of its own) might find themselves lonely at the top.

S&P 500 (SPY) 180.98 the 50 DMA and key to cross and hold. Under 177.40 trouble again

Russell 2000 (IWM) Eyes here as they remain the weakest index. Over Friday’s high would be welcomed, but if fails to cross that boundary and turns south, hard to imagine a sustained rally in the others for much longer

Dow (DIA) A good rally to a near midpoint between the 2014 highs and lows. That makes Monday a pivotal day here for sure.

Nasdaq (QQQ) Has to defend 86.45 now and continue to show leadership, especially now that all the big guns have reported.

XLF (Financials) 21.50 is the 50 DMA and the beacon for this to cross. Otherwise, still see it as a great rally to resistance

SMH (Semiconductors) 41.63 is the 50 DMA here. Do or die

IYT (Transportation) Touched the 50 DMA but couldn’t penetrate. This is what I mean when I say that the market rally in indices needs the front linesman to come out swinging

IBB (Biotechnology) The range in this ETF has blossomed to nearly $8.00. Now that sure says something

XRT (Retail) Alas, with all the strength, this could not get over the 200 DMA. Therefore, we officially designate this sector as the most important “one” to watch. Over the 200 DMA, great-if rolls over, pay your check and go back on a diet.

IYR (Real Estate) Have been writing about the bottoming formation for a while. Now, this is close to the 200 DMA

XHB (Homebuilders) Sitting on the 50 DMA

GLD Looks a lot better and still has lots of room

USO (US Oil Fund) Unconfirmed phase to accumulation

OIH (Oil Services) Here is another group wrestling with the 200 DMA

XLE (Energy) Did clear the 200 DMA here and now needs to defend it

XOP (Oil and Gas Exploration) Ok but not that impressive

TBT (Ultrashort Lehman 20+ Year Treasuries) This week, the rates could firm based on what I see on the weekly and monthly charts here.

KRE (Regional Banks) Looks like a bear flag forming.