TradeWinds for May 2nd

Last week was a good week indeed, which solidified the on going rally and puts behinds us all the talk of bear markets. Not only are momentum indexes looking good (still a touch over bought), but I did some review of the longer term - weekly, monthly - momentum indexes and found some very favorable information.

We use the weekly and monthly momentum as part of our scoring algorithm which feeds into our Top 25 rankings. For several weeks now the weekly momentum has turned to the long side virtually across the board of the major indexes. At the conclusion of this past week, we now have the monthly momentum also turning to the long side. The monthly charts are very slow moving and they very rarely whipsaw. When they turn, you can count on them continuing in the direction they are pointing. You can now trade with much confidence to the long side. You should watch our momentum charts closely for those short term over bought adjustments or dips and plan your trades accordingly.

Looking at sectors, technology is taking over the leadership role. In ranking the top indexes and sector ETFs using our scoring system - techs take two of the top five spots. The top 5 are - QQQQ, USO, DIA, MDY and XLK. Oil and four broad based indexes are the leaders. Don't doubt the breadth of this rally.

Now check out the Top 25 lists and TradeWinds Black Box for some trading ideas.