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We've had a good sampling of earnings so far, and the confessionals continue this week. All in all, we've seen a decent showing. Some of the follow-up price action was due to a previous run-up (as was the case with

IBM

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). For the most part, the results and guidance have been positive. Sentiment still continues to be the driver of action.

Even with Friday's pullback the markets are significantly overbought in the interim. Now, that's not necessarily a bad thing, but you wouldn't want to get on board with new trades just yet.

Technically, there are some areas of strength that beg for a look on the next pullback. Financials may have run ahead and the giddiness was sold. That's OK, however, as there may be opportunity. The financials have been crushing estimates. At the beginning of this week, technology had been mostly mixed but was once again a pullback away from being overbought.

The VIX had been showing us a level not seen in over a year. It has been consistently pressing lower and went to less than 21 to close last week. If it stays under 25 that would bode well for the bulls and eventually get it pulled under 20 before too long. We generally worry about too much complacency, but until it turns the other way we have to focus on the trend.

Commodities and the Greenback

The coming few months could be big for commodities. Oh sure, gold has had a big run the last six weeks and is up nearly 15%. Silver has also been on a roll, but it hasn't gained as much as gold. Oil has been on the move lately, and I recently wrote that the $75 level was stiff resistance, but that once that broke we would see $90 very soon.

Naturally, much of these moves in commodities are highly correlated with a falling dollar. While we've seen (and heard) about a tanking dollar and the negatives, let's remember what has happened to the currency in the last year or so. Last fall, the greenback surged on safe-haven buying in the face of a massive storm. That's been repealed. In fact, the buck is just back to where it was in the summer of 2008, when the markets were reaching highs!

Lacking a catalyst, the dollar is probably not going much higher but may languish and bottom for awhile, until the

Fed

considers tightening. That could be months away. So for now, a weak dollar trade is likely good for equities in commodity-related sectors. Some of the groups that look attractive include steels, metals, oil services, drillers, refiners, fertilizers and gas. Stocks in these sectors include

Schlumberger

(SLB) - Get Schlumberger NV Report

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,

Transocean

(RIG) - Get Transocean Ltd. Report

,

Randgold

(GOLD) - Get Barrick Gold Corporation Report

and

BHP Billiton

(BHP) - Get BHP Group Ltd. Report

.

Lang is conducting a "Trader Talk" Web seminar at 4:10 p.m. EDT Tuesday in which he will analyze the markets. Click here to register.

At the time of publication, Lang had no positions in stocks mentioned.

Bob Lang is a senior analyst and portfolio manager at

BigTrends.com

. He manages subscription services for the firm and writes timely articles about markets, trends and the economy. Lang's articles can be viewed on numerous sites on the Internet. Together with renowned market timer Price Headley, Lang has helped build his supported products into a winning class. He participates in a coaching forum for advanced traders in which he teaches his unique style of trading.