The Week Ahead: A strong batch of earnings reports has investors feeling good again as the major indexes resumed there move to new highs for the year. Whether this rally has legs or not could depend on how much the weak housing sector has spread in the economy. To that end, watch Tuesday's March Existing home sales and Wednesday's new home sales figures for further evidence. Also crude oil and gasoline inventories will provide clues to energy prices near term. The jobless claims numbers on Thursday will shed light on unemployment.

Stocks to Watch: On the heels of last week's good earnings from American Express, Caterpillar, Honeywell, and McDonald's are this week's Dow components of Exxon Mobile (XOM), AT&T (T ), Boeing (BA), 3M (MMM), and Microsoft (MSFT). Shares of Oakley Inc. (OO) broke out to near record territory after announcing that sales rose by 31% and boosting 07' guidance. On the downside Capital Bancorp (CBC), Mentor Corp. (MNT), and Robert Half Int'l (RHI) all came in weak on earnings and/or sales as there stocks corrected accordingly.

Special Note: On a weekly and monthly chart the current rally appears to be a continuation of the rally that started last summer and therefore more likely an ending rally versus the start of a new move higher. Evidence suggests that the late February and early March sell-off did not become sufficiently oversold to mark a major bottom. Although earnings have been strong, this is more of a lagging indicator and not indicative of future results. Many leading indicators by the same token are blinking caution signs directly ahead.


Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.

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