This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Will Stocks Top Out on May Day?

Stocks in this article: XLU IYT DIA SPY TWM QQQ

NEW YORK ( TheStreet) -- The first day of May is termed May Day as a celebration of spring. This year the market is celebrating the spring to another all-time high for the S&P 500 set at 1597.57 yesterday. The first business days of May in 2011 and 2012 were "mayday" alerts as the S&P 500 set tradable tops two years in a row on this day.

We begin May 2013 without a confirmed market high and with the other major averages below all-time highs. The Russell 2000 set its all time high at 954.00 on March 15. The Dow Industrial Average set its all-time high at 14,887.51 on April 11. Dow transports set its all-time high at 6291.65 on March 19.

While I cannot make a prediction that today is a market top, I would not rule it out as history tends to repeat.

What we know today is that the Dow utility average has become the leading index with a four month gain of 18.6% by setting new multi-year highs almost daily since taking out its Aug. 1 high at 499.82 on March 25. Since then utilities have gained 7.6% to the April 30 high at 537.86 vs. its all-time high of 555.71 set in January 2008.

The utility sector is 11.7% overvalued but among the 211 stocks in the sector 62 stocks are rated strong buy and another 127 are rated buy. On April 2 I wrote Dow Utilities Outperform S&P 500 in First Quarter show that 14 of 15 stocks in this index were rated buy, and that one way to play the sector was investing in the Utilities Select Sector SPDR Fund (XLU) ($41.43), up about 6.0% since that post. Monthly and semiannual value levels are $39.09 and $36.48 with quarterly and annual pivots at $40.27 and $40.52 with this week's risky level at $41.60.

The transportation sector is 14.9% overvalued and among the 177 stocks in this sector 89 are rated sell and another 48 are rated strong sell. With 77.4% of the stocks in the sector rated sell I continue to rate this sector "avoid-source of funds." Since setting its all time high at 6291.65 on March 19 the Dow transportation average is down 1.8%, but ended April up 16.4% year to date.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs