The Week Ahead: Hedge fund problems linked to a weak sub-prime mortgage market and higher oil prices both contributed to recent markets jitters while yields on bonds rose further. The Federal Reserve meetings begin on Wednesday with an important interest rate decision due on Thursday. Significant reports for this week include Monday's existing home sales, Tuesday's new home sales, Thursday's final 1st quarter GDP release and jobless claims numbers, and Friday's May construction spending numbers.

Stocks to Watch: Shares of both Accenture Ltd. (AC N) and Seagate Technology (STX) were added to the Russell 3000 Index and sport bullish near term patterns. Jabil Circuit (JBL) beat the estimated earnings per share as it broke away from a bottoming area and through its 50 day moving average. The Senate passed an energy bill mandating more ethanol production. Stocks in this group that received a lift include: Vera Sun Energy (VSE). Pacific Ethanol (PEIX), Aventine Renewable Energy (AVR), and US BioEnergy Corp. (USBE).

Special Note: The Dow Jones Industrials and other major indexes continue to push in the late stages of a five year rally. Over the past year the succession of highs in the market have been accompanied by a weakening economy. Such divergences have a limited amount of time to run before the fundamentals catch up to stocks prices via more and more earnings misses and disappointments. Stay diversified among as many sectors as possible and lock profits in when appropriate to allow cash for new opportunities.


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

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