The iShares Dow Jones Transportation (IYT) was up even more last week than IWM, gaining close to 6%.
The weekly chart shows the very strong breakout from the trading range (lines a and b) that was formed during most of 2012. There were signs before the holidays that this lagging sector was catching up, and as I noted then, this was a positive sign for the overall market in 2013.
The weekly and daily relative performance analysis have completed their bottom formations, as the yearlong resistance (line c) has been overcome. The weekly OBV has moved back above its WMA for the first time since June, with next resistance at line d.
There is minor support now at $96 to $96.60, with stronger levels to follow at $94.50.
All of the secrtor ETFs had great gains last week, led by the Select Sector SPDR Energy (XLE), Select Sector SPDR Financial (XLF), and Select Sector SPDR Industrials (XLI),which were all up over 5%.
The Select Sector SPDR Consumer Discretionary (XLY) was not far behind, gaining 4.7%, as did the Select Sector SPDR Materials (XLB).
The Select Sector SPDR Technology (XLK) wasup over 4%. The weakest were the Select Sector SPDR Utilities (XLU), Select Sector SPDR Consumer Staples (XLP), and Select Sector SPDR Health Care (XLV),all up around 3.5%.
The March crude oil contract gained over $2 last week despite concerns over low demand. The technical picture appear to be telling a different story, as the 50% Fibonacci retracement resistance has been overcome. The 61.8% resistance is at $95.70, which if surpassed will signal a move back to the $100 level.
The OBV surged strongly in December, confirming the price action, as it overcame the resistance (line a).
The metals had a wild ride last week. After surging on Wednesday, they quickly reversed to close the week near the lows.
GLD closed below the daily uptrend (line b) and is just barely holding above the 61.8% support at $158.10. The OBV still looks weak, as its downtrend (line c) is still intact. It will be important to see whether the OBV can hold above its lows and the uptrend (line d) this week.
The Week Ahead
Hopefully some of you took my recommendations to get invested in the stock market in the past month. Even a more conservative approach like equity income funds or closed-end small-cap funds I liked last month have done well.
If not, there will be additional opportunities, but the risk will be a bit higher. Don't chase the market—but do develop a plan for new buying.
There are likely to be further opportunities in the coming weeks and some of the high-dividend stocks that also have growth potential are one place to look. This would include some of the Dow stocks I recently recommended.
I am still looking for a deeper correction to get more involved in the overseas markets, but there will be opportunities in the coming months. The long-term outlook for gold still looks positive, but the short-term action does not favor buying now.
Those who have 401ks should think about analyzing your funds. As I explained last year, this is a good time to get well positioned for 2013.Don't forget to read Tom's latest Trading Lesson, The Most Powerful Pivot Level