It was quite a week for the markets, as the energy/oil sectors lead the way and pushed both the DOW and the SP 500 into new heights. This probably caught many investors on the short side by surprise. It seems like the ones that are eager to call a top are finding themselves trying to “put a cover” on an exploding volcano!
Last weekend, I forecasted that OIH may try to break its all-time high. It did so this week.
OIH finished the week at 169.98! While some of the buying may have to do with the options expiration, and OIH is getting more and more toppy, it is still prudent to wait for OIH to show signs of weakness. It seems like the drillers have gotten their next leg up started, which is what OIH is heavily invested in.
Aside from oil services, the refiners seem to have some sparks in them still, as XOM closed Friday at a new alll-time high! Even TSO, trading as low as 111.5 earlier during the week, was able to bounce back to almost 119!
Although some people may think that buying oil/energy stocks at these levels are crazy, as much as I dislike saying this, we might not have seen the real “craziness” yet! Remember the techs in 1999-2000?!
Speaking of the techs, Nasdaq was no where near the show that the DOW and the SP500 put on, although it did manage to get some healthy consolidation this week.
Nasdaq successfully bounced off the 2525 support level and seems ready to go higher. SOX and BTK have been consolidating for a few weeks, and perhaps will take another week or so to get started again. The Internet sector might bring some leadership as the chase for online ad space/technology is on!
Gold and most of the metals have been kind of quiet this week. GLD has been consolidating for weeks now.
It is sitting right at its 20-wk MA, and managed to bounce off 65 this week. I think it may need some more time to consolidate. The near-term range is still 65-69, with 65 in danger of being broken through.
Overall, the markets still carry a bullish tone into the new week (week of 5/21).
SPX shows that it continues to climb its weekly upper BB. The markets ended last week very strongly. We should see buying continue early in the new week, and perhaps, some venting at the end of the week.
Hope you’ve had a great weekend everyone! HappyTrading! ™