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NYSE model remains on buy but divergences are beginning to appear in 2
of the 3 NYSE breadth models and Friday was a NYSE daily reversal day,
intermediate term NYSE model still in good shape. NASDAQ model managed
to climb into buy territory, however the intermediate term model remains
in poor shape and we did not look to buy NASDAQ. AGet PITI on June SP
has declined to 33 which appears to confirm the 1563 projection I posted
last week indicating that SP is more likely to put in a double top
rather than new highs on this trip up.
As we took money off the S&P table early this week, we nibbled on
Vanguard Intermediate and Long term corporate index and REIT index
funds. Balance of S&P index will be sold on either NYSE sell signal or
rally to 1560 area in June SP.
On trading side, looks like a bit more weakness ahead in commodities but
nothing major. We liquidated long side of hedged May sugar
Thursday/Friday and kept the short side for a pullback and will re-enter
long December if correction doesn't run too deep. Watching W, BP, and JY
for possible longs. Also eyeing possible exhaustion gap in HG - copper
is at critical juncture. A rally through the gap could indicate a
sustained rise ahead and strength in the economy while a new low could
signal recession.
Earl
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