The Week Ahead: The economic calendar lightens this week ahead of the Memorial Day weekend, but the market continues its multi-week run to higher highs. With gasoline prices near record highs the crude oil and gasoline inventories report on Wednesday becomes increasingly important. Thursday brings the durable goods figures and new home sales for April along with the weekly jobless claims. Friday, the week ends with the April existing home sales numbers, and the bond market will close early.

Stocks to Watch: International Business Machines (IBM) lifted up from a small consolidation after its CEO commented that its earnings could reach $11 a share by 2010. International Game Technology (IGT) and Trump Entertainment (TRMP) both moved higher amidst takeover speculation by private equity firms. ValueClick (VLCK) is getting attention as an acquisition target now that Microsoft is buying the online advertising company aQuantive Inc. (AQNT) for a hefty premium. Lin TV Corp (TVL) hired JP Morgan to explore the sale of company.

Special Note: Look for volume to slow further this week in the markets, but prices to rise as a seasonal bullish bias ahead of the holiday takes hold. This will further increase the divergences that have been created in this blow-off period that the stock markets have experienced since the March low. In particular, the majority of the markets remaining strength is being concentrated in the big cap indexes while the small cap and NASDAQ are lagging behind badly suggesting the small caps will lead the next leg down. Continue to hedge positions and raise cash where appropriate.


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

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