From: Fallondpicks.com

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Friday did for the bears what Tuesday did for the bulls. Higher energy prices were the cause celeb for the drop in the Tech markets, but don't ask me why $73 oil was completely ignored on Tuesday when bulls were a rampaging on Fed news, while $75 oil is considered to be the end-of-the-world. The week was like a microcosm of a bull market; with money surging into Tech [NASDAQ and NASDAQ 100] and small caps [Russell 2000] early on, only for it to rotate into 'safe' large caps by the end of the week [Dow and S&P]. Media talk of 5-year market highs (in Tech markets) should be viewed within the context of a near 100% gain in the markets from October 2002 (1,109) to the end of 2003 (2,153) and the bare 10% gain in the markets since (2,378 as of Friday). The only real winners in this scenario are your broker.

In Tech markets [NASDAQ and NASDAQ 100] the MACD bearish divergence held firm in the face of last weeks buying. Higher volume distribution in these markets, on huge bearish engulfing patterns, has brought into play the potential for double tops. Such patterns would be confirmed on a close below 2,299 in the NASDAQ and 1,684 in the NASDAQ 100. Of greater significance was the demotion of the Tech markets as laggards to the large caps [Dow and S&P]. At least small caps [Russell 2000] held their leadership position. The Russell 2000 was also helped by its continued trading above 766 support, but it too is shaping up a MACD bearish divergence. Large caps [Dow and S&P] closed the week with their head under the duvet covers and were able to avoid the Tech slaughter. The semiconductor index was (unusually) left relatively unscathed (although down) from Tech selling

Tech secondary indicators [$NASI, $NAA50 and $BPCOMPQ] were notable for the picture perfect reversal off resistance in the $NAA50. It will take more than modest gains in the $NASI and $BPCOMPQ to prevent the most recent bullish crossover in the 5-day EMAs from turning into yet another whipsaw signal. The best times to buy have occurred when the $NAA50 has lurked in the 600s and below, not at 1,400 and above. Greed can kill many a profitable account - last Tuesday's action was no exception to this rule.

Newsletter update:

ECOL was a Subscriber feature for March 8th. The stock still looks in good shape for further gains (look for $30-35), but for my purposes it has reached its measured move target for a 30% gain. ASIA was a Subscriber play from March 10th. The stock shed 8% with earnings due next week. The stock closed for a 3% loss having been up 16% at one stage. PLMD was a Subscriber pick from April 10th. The stock closed down 9% in heavy trading to close the play out for an 8% loss.

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