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Sector Focus
The iShares Dow Jones Transportation (IYT) made sharp new highs Friday at $105.53, but then closed near the day’s lows. It was a bit lower for the week, and may be ready to correct, as it has had quite a run.

In last Monday’s column Sweetest Sectors for 2013, I updated the overall sector focus from 2012 to 2013. I will be watching the relative performance of the sectors closely over the next month to see if there are any changes in leadership.

My favorite list has not changed much since early December, except for the addition of the energy sector in the middle of January. The Select Sector SPDR Energy (XLE) was the star performer again last week, up 1.6% following a 1.7% gain the prior week. It is up over 11% since late December. Several of the oil stocks like Valero (VLO) and Hess (HES) had explosive rallies last week.

There were several strong sectors last week, including the Select Sector SPDR Health Care (XLV) and the Select Sector SPDR Financial (XLF), which were both up over 1%. The two surprises last week were the Select Sector SPDR Utilities (XLU) and Select Sector SPDR Technology (XLK), which were both up over 1.4%.

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Crude Oil
The April crude oil contract had another nice week, closing up $1.50 a barrel. The weekly downtrend (line a) has been decisively broken, with the quarterly R2 resistance now at $100.90.

The weekly and daily OBV look strong, as volume surged in January. There is first good support now in the $94.50 to $95.80 area.

Interest Rates.
The chart of the ten–year T–Note shows that yields did close above 2% last week. The resistance at 1.922% (line b) has been decisively overcome.

The junk bond market had a rough week. But while a short–term peak may be in place, there are no signs yet that bonds have formed a major top.

Precious Metals
The SPDR Gold Trust (GLD) had some wide swings last week, but was resilient as it rebounded Friday. This has improved the technical outlook. I will be looking at it more closely over the weekend. Watch for an update next week.

The Week Ahead
The close Friday was impressive, and while I have been cautious for the past two weeks, there is a chance that stocks can see another burst to the upside over the near term before we get a meaningful correction.

If this occurs, it will be a hard for those not in the market, as the urge to buy may be overpowering. I would resist this—especially in the index ETFs—though there will still be some stocks this week to buy.

I have no problem taking some profits on stocks I recommended late last year, even though I may leave another 5% to 10% on the table. It is easier to sell into strength.

For those not in the market at all, you might take a small position in something like the Nicholas Fund (NICSX). It is a mid–cap fund with a low minimum. Only put in 10% to 15% of your total position in now, and then look to average in over the next two to three months.

• Don't forget to read Tom's latest Trading Lesson, Tracking the Market's Trend.
• Editor’s Note: If you’d like to learn more about technical analysis, attend Tom Aspray’s workshop at the Traders Expo in New York, February 17-19. You can sign up here. It's free!