Oil Moves Higher, Key Stocks Soar, Indices Have Modest Rally

DJIA + 45.68, +0.36% SP500 + 5.49, +0.40% NASDAQ Comp. + 5.46, +0.22% Russell 2000 + 4.07, +0.55% Oil closed at $131.03 up $2.18 Indices moved higher for the second day in a row and closed near their highs on Tuesday. Gains were smaller than on Monday. Energy, Basic Materials and Metals and Mining sectors moved much stronger than the broad indices. Both the DJIA and the S&P closed below Friday’s high. The stronger Nasdaq and Russell 2000 indices closed above Friday’s high for the second straight day. The market breadth was not impressive as NYSE advancers led decliners by 1.3 to 1 and on the Nasdaq the advancers/ decliners was a paltry 1.05 to 1. Watch trading tomorrow to see if the broader market follows the energy, materials and mining stocks or if this is a sector specific up trend that is taking place this week. We need to see the broad indices move back above resistance to change our intermediate trend to up. Oil stocks USO, XLE, APA and NOV were higher with bullish engulfing candle patterns as were many others stock in the energy sector. Coal stocks KOL, MEE, CNX and BTU moved higher with bullish engulfing candle patterns also. Basic materials and Ag related stocks POT, MOS, MON, CF, AGU, PX, X, AKS, and NUE had huge up days reversing much of the recent weakness. Metals and mining stocks CLF and ANR had a mega up day. As mentioned yesterday we are changing our short-term trend reading to up. Today’s Action Moving Up: CF, CLF, BIDU, DRYS, MOS, MA, FSLR, POT, X, MON, SOHU, DECK, AGU, MTL, CNX, MEE, V, PCLN, BTU, RIMM, NUE, IBM, FWLT, USO, NKE, EXPE, IPI, GS, SCHN, AAPL Moving Down: GRMN, EBAY, CELG Intermediate Term Market Trend: Neutral Short Term Market Trend: Up