This Day On The Street
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Will Stocks Top Out on May Day?

A way to trade transports is via the iShares Dow Jones Transportation Avg (IYT) ($110.03). My annual value level is $97.32 with annual and semiannual pivots at $106.22 and $106.95 and monthly and weekly risky levels at $111.46 and $113.38.

In third place year to date is the Dow Industrials with a gain of 13.2%, but the number of buy rated stocks in the Dow has been declining and now stands at just 13. A way to trade the Dow is via the SPDR Dow Jones Industrial ETF (DIA) ($148.02). Quarterly and annual value levels are $137.01 and $126.69 with semiannual and monthly pivots at $143.01 and $145.87 and weekly risky level at $150.69.

In fourth place year to date is the S&P 500 with a gain of 12.0%, but only 30% of the stocks in the S&P are rated buy, which justifies my call to have 50% of your equity allocation in cash. A way to trade the S&P is via the SPDR S&P 500 ETF Fund (SPY) ($159.68). Quarterly and annual value levels are $144.56 and $134.74 with semiannual and monthly pivots at $156.59 and $158.22, and weekly risky level at $161.10.

In fifth place year to date is the Russell 2000 with a gain of 11.6%, but my proprietary analytics shows a wall of risky levels. Weekly, monthly and semiannual risky levels are 961.25, 962.82 and 965.51 versus the all-time high at 954.00 on March 15.

If you wish to trade these small caps from the short side consider the ProShares UltraShort Russell 2000 (TWM) ($19.56). My weekly, monthly and annual value levels are $18.92, $17.93 and $15.98 with a quarterly risky level at $22.77.

In sixth place year to date is the Nasdaq with a gain of 10.2% setting a new multi-year high at 3328.79 yesterday. The Nasdaq 100 is up just 8.5% year to date and 43% of the stocks in this index are rated buy. A way to trade the Nasdaq 100 is via the PowerShares QQQ Trust (QQQ) ($70.72). My annual value level is $60.27 with monthly, quarterly and weekly pivots at $67.17, $68.95 and $70.37 with a semiannual risky level at $78.39.
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DIA $177.59 0.00%
IYT $141.07 0.00%
SPY $206.33 0.00%
TWM $37.22 0.00%
XLU $48.42 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

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