June 5, 2008
Just what the doctor ordered for the bulls today. The major indices rallied nearly 2% across the board. If you didn’t get spooked out of the market in recent weeks you were making some nice coin in today’s action. Going into tomorrow, if we have a solid day of follow-through, then sentiment heading into the weekend will be very positive. What is ironic about today’s action, is that we would have least expected it with oil surging forward. Just as we have been writing about for some time now, oil would eventually get back some buying interest, and it did so today in an obvious way, but yet the market had an incredible day of trading. While we expected to see a surge eventually again in oil prices, we will be anxious to see whether oil can hold on to these gains, or whether, the enthusiasm has waned enough that it will be unable to hit new highs in the commodity; if the latter happens, then the sell-off is going to be hard and fast.
Retail provided quite the boost for the markets, and in one day, the charts for the NASDAQ and S&P drastically improved. NASDAQ has proved to be unstoppable since mid-March, with a textbook trend in place. In the Shareplanner account, we have managed to hold gains in ultra-long NASDAQ ETF’s (QLD) with gains of nearly 30%. The trend in the NASDAQ, broke out to new highs after being in a consolidation pattern for a few weeks, while the S&P is looking at wrecking the bearish head & shoulders pattern forming.
Here’s the NASDAQ and S&P Charts…