The Week Ahead: Although the inflation numbers were up in May, the market continues to view the figures as positive as the core numbers remain tame. Despite this, odds still favor an interest rate increase to occur first. A light economic calendar this week may hold the markets steady. On Tuesday, the May housing starts are released along with weekly retail sales. With oil pushing toward $70 a barrel, the oil and gasoline inventories on Wednesday could be important. Then Friday brings the jobless claims and leading economic indicators for May.

Stocks to Watch: Monsanto (MON) boosted its earnings target for 07' as its stock continues its long term up trend. NYMEX Holdings (NMX) broke to a new high on speculation that the company is in merger talks with the New York Stock Exchange (NYX) or the Chicago Mercantile Exchange (CME). Media General "A" (MEG) issued an earnings warning but the stock may already be near a major low. Gaming stocks could be on the move after Penn National Gaming (PENN) was just acquired. Finally, Nvidia Corp. (NVDA) received a strong buy from a major brokerage.

Special Note: The sell signal that was triggered the week of June 4th should not be ignored as the divergences among the DOW indexes continue and the technical backdrop remains tentative at best. The major indexes appear to be in the final vestiges of the rally that started in mid March. Very near term, look for the markets to continue to oscillate to new highs then sell off quickly as a battle between the bulls and bears at these lofty levels wages on. Continue to develop a well balanced portfolio of long and short positions.


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

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