The Week Ahead: A new period of volatility has crept back into the markets this past week as witnessed by the Volatility Index (VIX) and the major indexes gyrating down then up. Economic reports that may contribute to this volatility are the May trade deficit release on Tuesday, May retail sales and import prices on Wednesday along with April business inventories. Thursday brings the jobless claims numbers, and the May PPI. Finally, the week ends with 3 reports: May CPI, capacity utilization, and industrial production.

Stocks to Watch: Shares of Tyco International Ltd. (TYC) lifted on news that its Board approved the spin-off of Covidien Ltd. and Tyco Electronics. Fork lift maker, Cascade Corp. (CAE) reported strong earnings growth and sales rose 15% in their 1st quarter as the stock rose to new highs. Administaff Inc. (ASF) boosted its stock buy back plan by 1 million shares to 10.5 million as the stock broke through its 50 week moving average on the upside. A downgrade to Nike (NKE) by a major brokerage do to industry pressures in the U.S. hurt its shares.

Special Note: As the markets open for trading this week, the DOW Industrials are now 51 months into an up-trend without so much as a 10% correction. This is the first time in its 111 year history that such a feat has been established. Past durations near this magnitude have produced severe corrections much greater than 10% and as high as 50% in the DOW. With the Dow Utilities now leading the way to the downside and DSI (daily sentiment index) of traders perched near 90% historic highs, caution should be used and a diversified portfolio of longs and shorts developed.


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

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