Nine Trading Day Mark-Up Window Into 6-Month Report Card For Generals

take out last year’s 12/31/04 1211.92 close which happened on expiration Friday

with the 1216.97 close, +0.5% on the day and +1.6% for the week. The SPX

(
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PowerRating), to no surprise if you are familiar with how the Generals play

the game, led all the major indices on the week at +1.6% with positive closings

for five straight days. The Dow
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PowerRating), 10,623, was +0.4% on Friday and

just +0.8% on the week. The
(
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PowerRating), 37.89, was +0.9% on the week and flat

on Friday, while the Nasdaq
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PowerRating) closed at 2090, +1.3% for the week,

just below the 2100 head-and-shoulder neckline and -4.9% below the 2192 bull

cycle high. The SPX 1216.97 close is just -1.0% below the 1229.11 bull-cycle

high and with nine trading days left until the June six-month report card, so

you can bet the ranch that the Generals will make a monster effort to take out

become simply quasi-index funds, and the primary benchmark is the S&P 500, not

the NDX 100 and certainly not the Nasdaq Composite. In fact, the S&P 600 small

cap and S&P 400 mid-cap indices have already taken out their bull market March

highs. Also, the S&P 500, on an equal-weighted basis, made a new all-time high of

1582.78 on Friday which highlights the difference in index calculations, as per
thechartstore.com, an excellent

website for this kind of statistical information (see link). The media tongues

are tied as oil pushes $60 and the SPX approaches new highs, but if it retraces

any this week, it will be, of course, due to higher oil prices. The media’s a

to Triple Witch Option Expiration. (I don’t recognize stock index futures, as

they are not a real product.) NYSE volume expanded to 1.92 billion shares (1.27

billion up), the volume ratio 67 and breadth +805. The 4 MAs of the volume

ratio, 65, and breadth, +815, are short-term overbought, but that will probably

be worked off sideways, if at all, because of the dominant theme, which is the

Generals pushing their major holdings higher into month-end with just nine

trading days remaining. The sector leaders last week were gold (XAU +4.9%),

energy (OIH +4.6%) and cyclicals (CYC +3.2%, XLB +2.4%). The only sector to

finish red was the semiconductors with the
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PowerRating) -0.4% on the week to 34.44,

but my guess it that it will get broken out of the upside of its trading range

as the Generals mark-up prices into June month-end (see chart), which is

probably the last opportunity to reduce longer-term equity allocations into

strength, which could include the fifth-wave price continuation to 1254 – 1305

which is only +6.0% to 1305 from 1229. The buy-side game was on the recent

retracement to 1140 – 1160, not on new highs, especially for the majority of you

who thought it was too weak to buy on the retracement and now too strong to sell

into further strength. The same SPX RST sell pattern will set up above 1229 as

it did in 2000 for the SPX, Dow and NDX 100. The higher price goes above 1229,

so goes the risk level and the lower longer-term equity allocations should be