Bull\'s touchdown

Bulls had another great day, now the bad news does not seem to matter anymore. Maybe Fed's actions and the election-year effect already have positive impact on market fundamentals, and there is probably too much sideline money eager to get in. No matter how much we want to see another leg down, we have to respect the market. We were afraid of a bankruptcy from a financial institute, such as C or MBI, but now it seems like a distant memory.

Market is giving mixed signals - previous leaders are still down while other sectors are jumping up, from transportation, retailers, financials, homebuilders, to todays' semiconductors. Yes SMH broken out of H&S bottom today with 30% more volume. XLF finally breaks out of the upper trend line, and the crossing of 10MA and 30MA will surely attract more investor's attention. Is this another bull market with new leaders emerging? Is the market expecting blow-out third quarters from financials because of rate cuts?

Commodity is clearly breaking down, in particularly, gold and oil. It is a little bit puzzling to see USO/UNG dipped while oil service OIH holds well and there is no spike from DUG. Similarly, DBA dipped but fertilizer sector is also holding ground, though they did retreat in late session while the overall market was flat. We probably need some more time to see what is going on.

I am still holding my puts on weak sectors and called SMH and more XLF to hedge. Next week we will likely see a pull back, and then we will determine whether this is a W bottom or a B wave (target top trend line 13000 to 13100).

IBD high volume up day: ISRG NEU LKQX
Dow/Naz high volume up day: YHOO ISRG MNST

Have a great superbowl weekend.