Weekend Update - BKX,NYA,OEX, & IYR

The Bank Index -Philadelphia (BKX)- Monthly Chart
Today I would like to go over the Bank Index because I think we will start to see leadership in this sector. As you can see from looking at the monthly chart, the BKX is in a multiyear slim jim pattern. The indicators and oscillators are in a bullish trend reversal.

NYSE Composite Index (NYA)- Monthly Chart
The NYA has taken out former resistance and is trading at new 52 week highs. As you can see from the monthly chart, the NYA has broken out of an ascending symmetrical triangle. The pattern has been in a bullish trend reversal since 2003. Notice the expanding volume as price increases. However, I do want to remind you that the market will get pullbacks and we will want to buy those dips. The NYA is up 4.41% this month at 8096.14.

S&P 100 Index (OEX)- Daily chart
The daily chart illustrates that the OEX is in a year long slim jim. One thing that I would like to point out is that the following stocks are making new 52 week highs: CAT,PC,SBC,UTX,MSFT,MCD,HON,JPM,MRK,HPQ,& PFE. The aforementioned stocks went from the gutter to out performing. Again, the indicators and oscillators are bullish. New all time highs are B-U-L-L-IS-H.

Real Estate iShares ETF - (IYR)-Daily Chart
The IYR daily chart illustrates that it is forming a large ascending triangle. As you can see by looking at the chart the IYR has broken out of that triangle today. The IYR is up 1.50% at $68.92. I am bringing up this chart to point at the fact the strength in this ETF will also bring strength into the HGX and housing stocks will likely soon catch a bid. Furthermore, indicators and oscillators are in a bullish trend reversal and are making new highs along with price.

Reminder:
Since we are in a rising market, you may want to look to the site's stock scanner for additional idea flow on stocks in your favorite sectors.

Relative Strength Index (RSI) Oscillator

Implication Description Trading Considerations Implication When the RSI falls below 30 (a technical event), a bullish signal is generated. When the RSI rises above 70, the technical event is a bearish signal. top Description The Relative Strength Index (RSI) is an oscillator that measures a particular financial instrument's current relative strength compared to its own price history. The RSI should not be confused with relative strength which rates a financial instrument in relation to a market such as the S&P index. The RSI is plotted on a vertical scale numbered from 0 to 100. The formula to calculate the RSI is 100-[100/(1+A)] where A is the average of the "up" closes over the calculation period divided by the average of the "down" closes over the calculation period. Different calculation periods can be used. The most popular is a 14-day period. The "A" for a 14-day period is calculated by dividing the 14-day "up" close average by the 14-day "down" close average. An "up" close or a "down" close is defined as the absolute change in price from close to close. top Trading Considerations The RSI sometimes shows more clearly than the price chart itself the support and resistance lines for a financial instrument. Failure Swings which are also known as support or resistance penetrations or breakouts can be detected by using the RSI. Failure swings occur when the RSI passes a previous high or falls below a recent low. Divergences (when market trends go in a different direction than market indicators predicted, usually signifying the onset of a trend change) occur when the price makes a new high (or low) that is not confirmed by a new high (or low) in the RSI. Prices usually correct and move in the direction of the RSI. A financial instrument is considered to be oversold when its RSI falls below 30 and overbought when its RSI rises over 70.