Well, last week was a pretty darn good week, particularly if you were in the tech space. And the good thing is, there is no reason to not expect more to come in the coming week.
Our momentum charts are telling us that we just had a nice blowing off of the froth that built up a couple of weeks ago. The Moderate and Fast Momentum dipped hard, recharged and are moving up nicely. At the same time our slow or long term momentum never broke down and continues to sail in the nice smooth water of positive TradeWinds.
We are just a smidgen overbought on the Fast Momentum, only because we have had three strong moves in a row, but in terms of absolute numbers its not in overbought territory, nor is the Moderate Momentum. Therefore, if you are an aggressive trader, you should be buying any weakness this week - assuming there is no news that comes out to change the environment.
Sectorwise, the techs have taken on market leadership, along with small and mid caps. The Dow and OEX were notable laggards last week. Energy is still strong in absolute numbers, but showed some weakening last week, so I would keep an eye on them. Finally the precious metals rally collapsed last week, along with the Euro and bonds - so they are not on my list for now.
To get more detailed trading advice, check out our Top 25 lists and the results from last week's sizzling TradeWinds Black Box.
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