It's no secret that the character of this market has been shifting over the past several weeks as the market adjusts to lowered expectations across the board.  However, when GE reported awful results last Friday it was a bit too much for the bull to swallow, leaving the indices in a bit of a precarious position.  .. BUT ah what a difference a week makes.  This time around Google proved all the doubters, doom and gloomers wrong.. very wrong and it provided just the spark this market needed to break out in a big way. 

Buyers remain in control with shorts running scared but how long can it last?  We're already up 10% off the bottom and major resistance points stand in the way of another 10% mover up.  What happens when the Ag and Oil stocks begin to slip?  Can new leadership emerge?  Perhaps tech can find a grip once again following Google's results.  I believe it's a bit late too be getting aggressive on the long side unless you are trading in the short term.  I've been mentioning over the past several weeks that I've been adding some new long positions on the pull backs as the market appeared to be coiling for a big rally.  However, I'm not willing to get aggressive at these levels and may even look to lock in profits soon or hedge with a few short positions.

Let's take a look at the technicals of the major indices.

The Nasdaq on Friday gapped up big and was able to clear some resistance of the April highs but still faces stiff resistance at the Jan highs.  The buy vs. sell volume indicates that buyers remain firmly in control for now.  I like the odds of breaking those Jan highs but I don't like the odds of breaking through the major downward trend.  It's at that point I'd be significantly paring back on long positions and getting short.

We see the same thing in the S&P.  A big move up on Friday but still faces some important resistance at the January highs and even bigger resistance at the major downtrend line which isn't all that far away.  Certainly some more room to run, but if we get up into the 1425 level I'd be taking some chips off the table.  Note the relatively weak buy volume on these big moves.  Looks to be a considerable amount of short covering rather than big conviction on the part of institutions.

The Dow did manage to bust through those January highs, but look how close that downward trend line is.  Just 150 points away!  It's possible that this rally ends as quick as it began.  Such is a bear market rally.

 ::: Model Portfolio :::

** This section will now appear as a separate report about every other Wednesday. 

The Self Investors Model Portolio wrapped up 2007 with a 30.2% gain.  Would you like to receive buy and sell alerts within minutes (NEW! now get them via instant messaging in near real time) of each transaction in the portfolio?  You can receive these along with ALL of the tracking tools and reports with the very popular Gold membership.  Don't delay, get started today and join me for many more highly profitable months here at SelfInvestors.com.

::: Best/Worst Performers :::

- Top 10 Performing Industries For the Week -

1. Publishing - Periodicals: 29.35%
2. Dairy Products: 12.35%
3. Oil & Gas Equipment & Services: 10.95%
4. Internet Info Providers: 10.80%
5. Nonmetallic Mineral & Mining: 10.55%
6. Shipping: 9.85%
7. Investment Brokerage:  9.80%
8. Farm Products: 9.75%
9. Technical & System Software: 9.30%
10. Farm & Construction Machinery: 8.90%

- Top 10 Worst Performing Industries For the Week -

1. Major Airlines: -6.50%
2. Resorts & Casinos: -5.05%
3. Diagnostic Substances: -3.45%
4. Research Services: -2.70%
5. Long Distance Carriers: -2.40%
6. Personal Products: -2.25%
7. Banks - NE: -2.25%
8. Medical Appliances & Equipment: -1.85%
9. Medical Equipment Wholesale: -1.80%
10. Regional Airlines: -1.35%

- Top 5 Best Performing ETFs For the Week -

1. HLDRS Oil Services (OIH)  12.55%
2. India Fund (IFN) 10.90%
3. iShares US Oil Equipment & Services (IEZ) 10.25%
4. Morgan Stanley India Invest Fund (IIF) 10.00%
5. Powershares Dynamic Oil & Gas Equipment & Services (PXJ) 9.95%

- Worst 5 Performing ETF's -

1. HLDRS Biotech (BBH) -1.50%
2. SPDR Gold (GLD)) -.75%
3. iShares Gold Trust (IAU) -.70%
4. HLDRS Pharma (PPH)  -.50%
5. Central Fund of Canada (CEF) -.40%

:::  IPO's Worth Watching for This Week :::

This section will now appear as a separate post on Mondays.

While 2008 should be a much slower year for IPO's considering the deterioration of the market, there will continue to be some good companies coming to market here and there.  I'll be highlighting the best IPO's every Monday.

::: Upcoming Economic Reports (4/21/2008- 4/25/2008) :::

Monday:        None
Tuesday:       Existing Home Sales
Wednesday:  Crude Inventories
Thursday:      New Home Sales, Initial Claims, Durable Orders
Friday:           Mich Sentiment (prelim)

::: Earnings I'm Watching This Week :::

Monday:
Ametek (AME), Arch Coal (ACI), Bank of America (BAC), Canadian National Railway (CNI), Fording Canadian Coal Trust (FDG), Halliburton (HAL), Netflix (NFLX), Steel Dynamics (STLD)

Tuesday:
AK Steel Holding (AKS), AmSurg (AMSG), Anixter Intl (AXE), AU Optronics (AUO), Baker Hughes (BHI), CH Robinson (CHRW), Chicago Mercantile (CME), Coach (COH), Encana (ECA), Hudson City Bancorp (HCBK), Jacobs Engineering (JEC), McDonald's (MCD), Norfolk Southern (NSC), Options Express (OXPS), Peabody Energy (BTU), Smith Intl (SII), VMware (VMW), Yahoo (YHOO)

Wednesday:
Air Products & Chemicals (APD), Alcon (ACL), Allegheny Technologies (ATI), Aluminum Corp of China (ACH), Amazon (AMZN), Apple (AAPL), CDC Corp (CHINA), Chipotle (CMG),  EMC Corp (EMC), Range Resources (RRC), Ryland Group (RYL), Stericycle (SRCL), XTO Energy (XTO)

Thursday:
3M (MMM), Altria (MO), Baidu (BIDU), Bucyrus (BUCY), Bunge (BG), Century Aluminum (CENX), CNH Global (CNH), Deckers Outdoor (DECK), Diamond Offshore (DO), HDFC Bank (HDB), Interactive Brokers (IBKR), Life Time Fitness (LTM), MDC Holdings (MDC), MEMC Electronics (WFR), Microsoft (MSFT), Potash (POT), Rubicon (RBCN), Southwestern Energy (SWN), T Rowe Price (TROW), Terra Industries (TRA), Trade Station (TRAD), Union Pacific (UNP), VisionChina Media (VISN),

Friday:
Companhia Vale do Rio Doce (RIO)

::: In Case You Missed It - SelfInvestors Blog Entries of the Past Week :::

1. Gold Heading Lower, Natural Gas & Uranium Headed Higher? Transports Showing Leadership

2. Coiling For Big Rally? Leaders With Momentum - ATW, MTL, SD, ECOL

3. Top Breakout Stocks With Greatest Demand: Watch Digital Ally (DGLY)

4. Indices Reclaim 50 Day Moving Average Keeping Breakout Potential Intact

5. Breakouts! Gushan Environmental Energy (GU) & Digital Ally (DGLY)

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I highlighted both Gushan Environmental (GU) and Digital Ally in a report a few days ago which took a look at breakout stocks showing the greatest demand.

Today, both GU and DGLY are staging breakout from bullish formations with heavy volume.

Disclaimer:  I absolutely own both these!

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Just last Friday, the market wasn't able to continue the trend of shrugging off the bad news as the big GE earnings miss had the bears growling and indices plummeting below their 50 day moving averages.  The move was enough to cast doubt on a big spring rally, but the bulls would not be denied today

It isn't about the numbers.  It's about expectations… and Intel, Wells Fargo and JPMorgan all beat much lowered expectations and were catalysts in kicking off the morning in the green.  Not even a gloomy outlook from the Fed or record oil prices (yet again) could keep this market down as the indices once again threw caution to the wind and and closed strong near the highs of the day.

Today's move neutralizes the bearish move of last Friday and puts the indices back in contention for a spring rally as the Nasdaq, Dow and S&P500 all reclaimed support of the 50 day moving average with a tick up in volume.  Volume certainly could have been better with such a big price gain but if we can follow through tomorrow or Friday with better volume, we just might be able to bust through those resistance levels.

Let's have a look at the indices.

The Nasdaq gapped up above resistance of the 50 day moving average which should prove to be an important support level in the coming weeks.  Notice that volume just came in at around average but was significantly higher than yesterday so technically a day of accumulation and certainly a considerably bullish move.  Nasdaq 2400 is the next target and a significant source of resistance.  A breakout from there would be very bullish.  Perhaps strong results out of IBM and Ebay can be the catalyst for tomorrow.

The S&P also surged back above the 50 day moving average with average volume.  We could face big resistance around 1385 tomorrow.

The Dow looks poised to test important resistance levels tomorrow.  We need to breakout from the channel above  the area around 12800.

(Note: volume averages are based on the average over the past 50 days)
Data as of 4:00EST - End of Day April 16th 2008
Nasdaq: UP 2.8% today with volume at the average
Nasdaq ETF (QQQQ) 4.28%, volume 12% BELOW average
Dow: UP 2.08%, with volume 2% ABOVE the average
Dow ETF (DIA): UP 2.56%, with volume 10% ABOVE the average
S&P ETF (SPY): UP 2.71%,  with volume 18% BELOW the average
Russell Small Cap ETF (IWM): UP 3.17%, with volume 15% BELOW the average

::: SelflInvestors Leading Stocks :::

The Self Investors Leading Stocks Index is comprised of stocks in the Breakout Tracker, which is a database of the fastest growing companies near a breakout or having already broken out of a base.  Leading stocks did quite well today, outperforming all of the major indices with decent volume behind the move.

Summary:
* Advancers led Decliners 187 to 19
* Advancers were up an average of 3.68% today, with volume 10% ABOVE average
* Decliners were down an average of 1.55% with volume 72% ABOVE the average
* The total SI Leading Stocks Index was UP 3.2% today with volume 16% ABOVE average

::: Where's the Money Flowing :::

Many investing web sites provide leading industries based on price performance alone. However, without accompanying volume levels, this can sometimes be misleading.  The only way that I know of to gauge industry/sector strength WITH volume levels is through the analysis of ETF's.  A couple years ago this was not possible, but as more traders/investors use ETF's they become a much better tool for gauging the health of the market and seeing where the money is flowing (or not flowing).  Using the proprietary Self Investors Demand Indicator score which measures price and volume movements, I'm able to quickly see which sectors/industries are seeing the greatest inflows of cash.  For a detailed look at how I go about gauging sector/industry strength please see the following post: http://selfinvestors.com/si/industry_tracking/

* Current Leading Sectors/Industries (over last 30 trading days):  
Homebuilders, REITs, Intl Utilities, Biotech, Clean Energy

* Current Lagging Sectors/Industries (over last 30 trading days):  
Health Care, Telecom

* Today's Market Moving Industries/Sectors (UP):
Semis, Technology, Financials, Agriculture, Nuclear Energy, Materials

* Today's Market Moving Industries/Sectors (DOWN): 
None

::: Stocks :::

The stocks section will be an area where I highlight one stock selected from a group of stocks moving up with volume well above average and most likely breaking out of a base or consolidation.  I don't have time  tonight for a detailed stock of the day, so once again I provide a sample list of leading stocks moving up with big volume today (full list available in the Breakout Tracker.  There are some real gems here! (listed in order of Total Rank)

Baidu.com (BIDU) breakout!
AgFeed Industries (FEED)
Mechel Steel (MTL)
Heico (HEI)
ReneSola (SOL)
Cellcom (CEL)
Chart Industries (GTLS)
Rio Tinto (RTP) breakout!
T-3 Energy Services (TTES)
Balchem (BCPC) breakout!

Full Disclosure/Disclaimer: The stock of the day is by no means a buy recommendation.  Please do your own research and make a personal decision based on your own tolerance for risk.  I currently do own a position in Baidu (BIDU), Balchem (BCPC) and Mechel (MTL)

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