Elite Inside Trader

Last week the markets continued to push aside any bad news thrown in its path and continued its triumphant march higher.  We saw the volatility index (VIX) spike during the week, before quickly returning to lower levels.  With interest rates as low as they are, investors are still being forced to turn to equities and commodities as one of few potentially profitable opportunities left in the markets.  The markets have closed higher 6 out of the last 7 days and many stocks are pushing new 52 week highs.

Technology stocks continued to strengthen as they too headed higher, lead by Oracle (ORCL) which beat earnings guidance and raised its outlook for the year.  Accenture (ACN) also reported better than expected earnings which helped fuel technology stocks.  All you heard last week was that traders were moving out of financial stocks and into technology as last week’s bank dividend announcements failed to move the financial sector.  Weak housing numbers also lead to financials selling off.

We continue to watch the US Dollar as it moves lower based on investors lack of conviction that it’s still the world’s “safest” currency.  Towards the end of last week, the dollar moved higher on concerns that the European Debt Crisis is now looking to hinder the interest rate hike in coming weeks.  Adding fuel to the fire, Portugal’s Prime Minister resigned on Wednesday as his proposed Austerity measures were rejected.  The news lead ratings agencies to downgrade Portugal’s debt and higher interest rates only exacerbate the problem.

Action for the week:

It was a quiet week for us.  Most of the time was spent watching our current holdings head higher despite several horrible headlines.  Many of our holdings continue to outperform the markets, such as Silver (SLV), Discover Financial (DFS), Micron Technology (MU), Biadu (BIDU), and more.  We have also been particularly interested in pharmaceuticals lately;  Bristol-Myer Squib.

The only trade we did pick up during the week was NovaGold (NG) Resources at $12.68.  Those shares moved above $13 and then settled back at $12.72 on Friday.  As mentioned in our recent article, Gold Breakout Alert, if gold can move slightly higher and hold its previous high, we can expect to see gold breakout to the upside.  Watch for a move above $1,448.00.  Portugal’s debt crisis might be the catalyst gold needs to continue its uptrend.  Gold bounced off its resistance level and headed lower again, but looks like it will make another attempt at moving above its resistance in the short term to breakout higher.

What We’ll be Watching This Week:

Most likely we’ll be watching health care stocks, insurance companies, gold, silver, and we will look to position ourselves in a few larger cap stocks to position ourselves accordingly for the coming summer months.   We’ll leave you with a quick snapshot of the stocks we are going to keep an eye on:  Research In Motion (RIMM), Capital One (COF), Bristol-Myers Squibb (BMY), Pfizer (PFE), Aflac (AFL), Johnson & Johnson (JNJ), Priceline.com (PLCN), American Express (AXP), and the Double Bullish US Dollar Index ETF (UUP).

Disclosure: Author, Kevin D. Monaghan, Senior Partner at Elite Investment Group, is long NG, SLV, DFS.

IMPORTANT NOTICE: "Any information we give you is not our recommendation or advice to take (or not to take) any particular course of action in relation to your investments. You should take your own independent advice based on your specific circumstances."

Tags: AFL, Aflac, American Express, AXP, Baidu, BIDU, BMY, Bristol-Myers Squibb, Capital One, COF, Discover Financial Services, Double Bullish US Dollar Index ETF, Euro, European Debt, Gold, JNJ, Johnson & Johnson, Micron Technology, MU, NG, NovaGold Resources, PFE, Pfizer, PLCN, Portugal, Priceline.com, Research In Motion, RIMM, Silver, SLV, US Dollar, UUP