Morning Update


Dow Jones Industrial Average (INDU)
Target still remains 11350 ever since we hit wave (2) in February of this year and ever since we broke out of the diamond top reversal. Yesterday the INDU hit 11334. Today we are having a pullback, possible to form a bull flag. The PPO is still strong and the stochastics are bull flagging. Target as stated still remains 11350 or higher. We are climbing the wall of worry, just as bull markets do.

The S&P 500 Large Cap Index (SPX)
On the daily chart the SPX is in bullish mode. The ascending triangle breakout pattern has been confirmed. Yesterday and today the SPX is in the process of back testing the the breakout line around 1295. Remmber bulls live above 1245.00 , and bear live below that. Bias has returned to bullish on the SPX. Microsoft is very strong and that is helping the technology sector. Price target remains 1304 to 1334. No rat braining allowed.

Sector performance charts SMLvs MID vs OEX
I have just brought these charts up to illustrate the fact the market top is not in. As you can see, over the past 5 years small and mid caps have out performed the large caps which have just remaind flat. The small caps and mid caps remain the best performing sector for the past 3 to 6 months. What more proof do you need? Stay in the small and mid caps for now. It is not until large caps begin to lead the market higher that a market top is being placed. The small and mid caps will lag the large caps when the top is close. For now, let us just wait until that occurs and let the charts do what they do in the mean time. (But if you want you can worry your way to the top - just kidding)

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.