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First the good news from our friends at U.S. Global Research on the Domestic Equity Market: "The figure shows the performance of each sector in the S&P 500 Index for the week. Nine sectors gained with one only sector declining, healthcare which fell less than one percent. The best-performing sector was industrials, up 7 percent. Other better-performing sectors included materials and consumer discretion. The three worst-performing sectors were healthcare, consumer staples and utilities. "Within the industrials sector the best-performing stock was Textron Inc., up 20 percent. Other top-five performers in the sector were Eaton Corp., Dover Corp., Emerson Electric and Precision Castparts Corp." 
Opportunities - There may be an opportunity for gain in M&A (merger & acquisition) transactions in 2010. Corporate liquidity is high, thereby providing the means to pursue acquisitions.
Threats - Should investors’ expectations for an improving economy not come to fruition on a reasonable time frame, it could be a threat to stock prices.
- As governments around the world begin to wind down monetary and fiscal stimulus programs put in place during the economic crisis, it will likely present a headwind for stocks.
Momentum is another positive factor. The "summer rally season" appears to be more possible as market movers drive stock prices and major averages higher. This way they can short the market (borrow stock and immediately sell that stock at the highest possible prices with the intention of buying it back and returning the borrowed stock at much lower prices after a correction).
Ryan Detrick, Senior Technical Strategist, Schaeffer's Research [Ryan points out some points of concern, both technically and fundamentally. Below are his comments] "I think Federal Reserve Chairman Ben Bernanke summed it up on Wednesday when he called the economic outlook "unusually uncertain." On Tuesday we rallied on "weak" earnings, and on Wednesday we sold off on big volume after "good" earnings. What else can you say, other than uncertainty rules? Nonetheless, earnings for the most part have come in better than expected and the market is showing some signs of life. "Don't get me wrong, there are probably more reasons to be very concerned out there than reasons to be bullish. We have worries over some poor, high-profile bank earning reactions, weak housing numbers, jobs, European debt, future dividend and capital gains tax increases, and lastly record lows for the two-year yields - suggesting the bond market isn't buying into the economic recovery. "Nonetheless, if everyone else is worried about these same things – you have to wonder how much of this bad news is already baked in. "What I do find encouraging is the fact that the S&P 500 Index (SPX) was able to substantially break above its 50-day moving average, along with breaking a three-month downtrend line. Again, we have some major concerns regarding the world economy – but price action is what matters, and this is a step in the right direction for the bulls.
"Again, although I see some positives, by no means is this an all-clear buy signal. Last year at this time we were very bullish on the overall market and rode it up into the April peak. Unfortunately, things aren't quite that clear today, and for this reason we recommend shortening your timeframes or making sure you have hedges in place. "With that said, the action in the financials is one area that has us concerned. Numerous names have had poor reactions to earnings and the price action on the XLF is rather weak.
"Meanwhile, the 50-day buy-to-open (BTO) put/call ratio on the XLF has peaked and rolled over sharply. This rollover looks quite bearish, especially when you consider the rally in 2009 was accompanied by a rising put/call ratio. Additionally, we see huge August puts relative to calls in at-the-money options. With heavy put open interest, there is always the risk of a major delta hedge-based decline from that put open interest."
So there are some insights and indicators for us to "chew" on as we start this new week. I'm told by "economic astrologers" that this coming week that the planets and the start are lined up in such a way that it doesn't bode well for world events. The possibilities for some nasty surprises are greatly increased. All I know is that the major US stock market averages have rallied off their recent lows and are flirting with some powerful lines of resistance. I also know that the market will do precisely what those in charge program the markets to do. Like any great casino or house of slot machines, the machines will "pay-out" as much as they are supposed to, and keep as much as they want. It all appears to be pre-scripted and pre-determined. Disclaimer: Nothing in this commentary should be construed as investment advice or guidance or any recommendation to buy or sell any financial instrument. It is not intended as investment advice or guidance, nor is it offered as such. It is solely the opinion of the writer, who is NOT an investment counselor/professional. All content of this commentary is solely an expression of his personal interests and is posted as free-of-charge commentary and is subject to error and change without notice. Please do your own due diligence before investing in ANYTHING. The presence of a link to a website does not indicate approval or endorsement of that website or any services, products or opinions that may be offered by them.
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Market Analysis & Insights 
