GARTMAN'S TRADING RULES ANNOTATED BY DOCTOR DORN

1. Never, Ever, Ever, Under Any Circumstance, Add to a Losing Position... not ever, not ever! Adding to losing positions is trading's carcinogen; it is trading's driving while intoxicated. It will lead to ruin. Count on it! (There are many traders—Jim Cramer is one example—that keep buying lower and lower. He describes this as "when the stock comes in, buy more and when it comes in more, buy more. Don't buy all at once, but in tranches. He does this because of fundamentals, i.e., he believes that good companies are bargains as their stock price goes lower. He has huge pockets. Most of us do not. Please—never confuse a good company with a good stock. Price is the only technical indicator that does not lie)

2. Trade Like a Wizened Mercenary Soldier: We must fight on the winning side, not on the side we may believe to be correct economically. (Trade with a killer instinct like a great warrior. Never try to be a hero and fight the trend)

3. Mental Capital Trumps Real Capital: Capital comes in two types, mental and real, and the former is far more valuable than the latter. Holding losing positions costs measurable real capital, but it costs immeasurable mental capital. (Trading and investing are 100% Neuropsychiatric and Neuropsychological. It is all inside your brain and anything that drawns down brain synaptic capital will affect your trading adversely)

4. This Is Not a Business of Buying Low and Selling High; it is, however, a business of buying high and selling higher. Strength tends to beget strength, and weakness, weakness. (This is a principle of trend trading and does not apply to everyone. Markets are trendless or range-bound more often than trending. In strong markets that are trending, this works well. In range-bound markets, both breakouts and breakdowns fail regularly)

5. In Bull Markets One Can Only Be Long or Neutral, and in bear markets, one can only be short or neutral. This may seem self-evident; few understand it however, and fewer still embrace it. (In bear markets, the winner is the one that loses the least money. In bull markets, everyone is a genius)

6. "Markets Can Remain Illogical Far Longer Than You or I Can Remain Solvent." These are Keynes' words, and illogic does often reign, despite what the academics would have us believe. (Markets are neither random nor rational. They are irrational and mean because there are over six million rat brains trading every day. Think of the markets as a complex, adaptive system that is constant evolving)

7. Buy Markets That Show the Greatest Strength; Sell Markets That Show the Greatest Weakness: Metaphorically, when bearish we need to throw rocks into the wettest paper sacks, for they break most easily. When bullish we need to sail the strongest winds, for they carry the farthest. (In life, as in the markets, the strong get stronger and the weak get weaker)

8. Think Like a Fundamentalist; Trade Like a Simple Technician: The fundamentals may drive a market and we need to understand them, but if the chart is not bullish, why be bullish? Be bullish when the technicals and fundamentals, as you understand them, run in tandem. ( YOU are not bullish or bearish. Your stock, commodity, option or future is in a bullish or bearish pattern. Bearish and bullish are not states of mind, they are states of the markets).

9. Trading Runs in Cycles, Some Good, Most Bad: Trade large and aggressively when trading well; trade small and ever smaller when trading poorly. In "good times," even errors turn to profits; in "bad times," the most well-researched trade will go awry. This is the nature of trading; accept it and move on. (But always remember that hubris can turn malignant and malignant hubris metastasizes and kills. Wall Street is littered with corpses of such people. Always remain humble and grateful for what the Market Mistress gives you)

10. Keep Your Technical Systems Simple: Complicated systems breed confusion; simplicity breeds elegance. The great traders we've known have the simplest methods of trading. There is a correlation here! (Albert Einstein said: Everything should be made as simple as possible, but not simpler than that. Remember Occam’s Razor and the K.I.S.S. principle)

11. In Trading/Investing, An Understanding of Mass Psychology Is Often More Important Than an Understanding of Economics: Simply put, "When they are cryin', you should be buyin'! And when they are yellin', you should be sellin'!" (Buy when there is blood in the streets and sell peanuts when the circus is packed with standing room only)

12. Bear Market Corrections Are More Violent and Far Swifter Than Bull Market Corrections: Why they are is still a mystery to us, but they are; we accept it as fact and we move on. (FEAR is always stronger than greed. There are too many one-rule systems and the “big guys” are all leaning in the same direction. When one of them runs for the exits, the rest follow like lemmings).

13. There Is Never Just One Cockroach: The lesson of bad news on most stocks is that more shall follow... usually hard upon and always with detrimental effect upon price, until such time as panic prevails and the weakest hands finally exit their positions. (Once everyone has puked, and the vomitus has been cleaned up from the floor, and the room begins to smell good again and the pesticides are finally working—it might be time to start nibbling at the stock. DO NOT ANTICIPATE OR TRY TO CATCH FALLING KNIVES. OUCH!!!)

14. Be Patient with Winning Trades; Be Enormously Impatient with Losing Trades: The older (more consciously competent) we get, the more small losses we take each year... and our profits grow accordingly.

15. Do More of That Which Is Working and Less of That Which Is Not: This works in life as well as trading. Do the things that have been proven of merit. Add to winning trades; cut back or eliminate losing ones. If there is a "secret" to trading (and of life), this is it. (In life, we want to hang with the winners and remove any and all energy vultures. Those people that are always moaning, whining, negative and sniveling will take emotional, physical, temporal and financial capital away from you. Time is money—both in the markets and in life. Make your life a “No Sniveling" Zone.)

16. 16. All Rules Are Meant To Be Broken.... but only very, very infrequently. Genius comes in knowing how truly infrequently one can do so and still prosper. (I don’t like this rule much, but there are rare times when you can break your rules. RARE TIMES!! Don’t get sneaky and smart about it, because it is likely to slap you really hard in the face or shred you like a head of lettuce.)

Janice Dorn, M.D., Ph.D.

http://www.thetradingdoctor.com/

Train Your Trading BrainTechnical Support: 480-325-0230

Media/Coaching/ Consultation: 602-944-4344

Where Commodity Futures Prices Open Sunday Night

Use this tool to follow the futures markets during the bull market in commodities that, according to historical cycles, will run 9 years (every 30 years for the past 200 years) and end around 2010. (prior starts - 1911, 1941, 1971, 2001). Why isn't gold at $2000 when it should be? I don't know, but the big moves don't happen overnight. Expect 80% of the move to happen in the last 20% (2 years) of the cycle. Also, with each Energy correction, view it as a time to step back in as we are in a global energy crisis.

According to Dr. Dorn, CNBC is nothing more than "Infotainment", because people want to know what happened yesterday and what's happening right now. But, what they are missing is a repricing of the entire planet. Hard money is trump. The public is just waking up to that notion. Gold is the new copper and food is the new oil.

Read about the Commodity Super Cycle echoing what I wrote in October, 2006 HERE.

1. July Crude: $132.19 - up big (all time record)
2. June Natl Gas: $11.857 - up
3. July Wheat: 752-4 - down
4. July Corn: 599-6 - up
5. July Soybean: 1368-0 - flat (buy Nov 1400 calls, sell Nov 1500 calls)
6. June Gold: $825.8 - up, recent breakout
7. July Silver: $18.29 - up big

Commodities & Futures Weekly Overview from the WSJ

MY CURRENT COIN RECOMMENDATIONS FOR MAY

• The Trend Trader for Tuesday
• Silver Strong Fundamentals
• The Energy Report Friday May 23, 2008
• Peter Schiff Predicts $2,000 Gold in 2009

Read: The role of commodities in a portfolio & Commodity ETFs

Eleven Ways to Play the Commodities Markets

Why Oil Prices Are Exploding - As oil producers become increasing consumers, exports decline over time; another thought-provoking piece passed along by John Mauldin. (hat tip Dr. Brett)

Why Commodity Markets Are Exploding - Thanks to a very astute reader for passing along this summary of testimony before the Committee on Homeland Security and Governmental Affairs. Eye-opening reading. (hat tip Dr. Brett)

Soaring oil and commodities prices do not a bubble make.

"Remember to watch your backside"

10 Best and 10 Worst Performing Industries: week ending 5/24

From msn Money Investing:

10 Best Performing Industries:
Industry- -% Change One Month

Aluminium : 56.5%
Oil & Gas Drilling & Exploration : 51.6%
Confectioners : 51.5%
Nonmetallic Mineral Mining : 38.2%
Broadcasting - Radio : 36.0%
Information Technology Services : 35.1%
Steel & Iron : 33.8%
Oil & Gas Refining & Marketing : 32.7%
Beverages - Brewers : 31.1%
Railroads : 30.8%

10 Worst Performing Industries:

Toy & Hobby Stores : -61.2%
Residential Construction : -53.5%
Sporting Goods Stores : -49.8%
Home Improvement Stores : -39.8%
Manufactured Housing : -38.9%
Regional - Southeast Banks : -35.8%
Investment Brokerage - National : -35.2%
REIT - Healthcare Facilities : -32.8%
Housewares & Accessories : -29.8%
Sporting Activities : -29.6%

note: click on industry for specific names.

MSN Favored Sectors: Public utilities, Energy, Technology

My Favored Sectors: Basic industries

Industry trends usually continue for several months, so MSN's list of the past month's 10 Best and 10 Worst Performing Industries should give you some investment ideas. But, be sure to wait until a sector is on a Point & Figure "buy signal" before purchasing (and the market is above the 200 DMA ), but Do not ignore market risk!

BigCharts 1-Week 10 Best & Worst Performing Sectors & 3-month Top Performer from Marketwatch

With the help of this ETF screen, you can gauge which sector the money is flowing to and which exchange traded fund is making new highs.

Another screen: ETF screener, from the WSJ.

LET THE 200 DAY MOVING AVERAGES BE YOUR GUIDE TO BE IN OR OUT OF THE MARKET(S) Go to: Stock Charts.com for updates and to HeadlineCharts for their Weekly Point & Figure Saturday Bullish % Sector Watch for risk levels on the markets and on sectors. Read: Point and Figure Patterns

Read: How To Time the Market With Bullish Percent Charts

Bill Cara's Week #21 In Review & Bespoke's Sector Relatvie Strength

Dr. Brett provides some ETF Resources for Traders and Investors

Wall Street Select's market sectors offers simple sorting functions.

Top 10 Sectors & Stocks by Relative Strength

Bob Chapman's Train Wreck of the Week

Surviving the Coming Inflationary Debacle: Government ignores own antitrust laws, gold going to intergalactic space soon, lust for power will destroy elites, the power of monetary and energy trump cards, costs that drive inflation, neocons controlling the media.

By virtue of their abject failure to support smaller domestic oil companies in their quest to tap our more-than-abundant local oil resources by implementing a floor for oil prices to protect these smaller producers against the evil, competition-killing efforts of the big oil companies, our current, and every previous, Congress and Presidential Administration have sold out the American public, and in the process, they have completely ignored every antitrust law on the books. Our corrupt government has allowed big oil to overrun our economy in much the same way as they have allowed illegal aliens to overrun our borders. Further, and with a goodly portion of poetic justice, this failure to support domestic wildcatters, which was orchestrated by the Illuminati as part of their plans for world dominance, will come back to haunt them.

In the end, the Illuminati will fail because they have outsmarted themselves.

We have all the oil we need within our own borders, even excluding Alaska, Texas and the Gulf of Mexico, much of it extractable at $16 per barrel, but there it lies, our salvation from foreign extortion buried under thousands of feet of rocks, like a fire ladder that is not long enough to reach the level at which victims are trapped by a blazing inferno. Their it all lies, in sufficient quantities in Montana and North Dakota alone, to provide multiple decades of freedom from foreign oil imports rendered untouchable by the big oil cartel's threat of oversupply and price manipulations in commodity markets which would violate every anti-trust law in the United States Code. - Read on if you dare!

International Forecaster MidWeek Reading - Gold, Silver, Economy + More

"take your investment advice from wealthy people and not from salespeople."

My Asset Allocated Fund Portfolios (as of 5/15/08)

PORTFOLIO #1: (long only OEF account @ Fidelity, loads waived)

1. 07% BEARX Prudent Bear - Bear Market
2. 07% WRMAX DWS Climate Change
3. 07% DDMAX DWS Market Neutral - Long/Short
4. 07% AAAAX DWS Alt. Asset Allocation - World Allocation
5. 07% CORAX DWS Core Funds Plus - Moderate Allocation
6. 05% SGDAX DWS Gold & Precious Metals
7. 06% NOTAX DWS National Tax Free--5 Stars
8. 06% PPIAX DWS Short Dur. Bonds --- 5 Stars
9. 10% FCNTX Fidelity Contra Large G -- 5 Stars
10. 06% KGDAX Global Opp. World M-G-- 4 Stars
11. 07% SQGAX Global Them. World L-B - 5 Stars
12. 20% PRPFX Permanent Portfolio L-B - 5 Stars
13. 05% GCS DWS Global Commodities Fund

PORTFOLIO #2: (long-short account @ Schwab)
Current market double-short positions : SDS & DXD (13%)

1. 05% KAUFX Fed. Kaufman Mid Cap - 4 Stars
2. 09% PRPFX Permanent Port. Cons. ---5 Stars
3. 04% STSMX Wells Short Muni ---------5 Stars
4. 03% SWEGX Schwab Markettrack- - - 5 Stars
5. 05% WWNPX Kinetics Paradigm L-G--5 Stars
6. 09% ACEQX Equity & Income Mod. -- 4 Stars
7. 05% JSVAX Janus Contrarian-L-B --- 5 Stars
8. 09% CGMFX CGM Focus L-B ---------- 5 Stars
9. 06% DIAMX Diamond-Hill L/S L-B ---5 Stars
10. 05% MATFX Matthews Asia Tech ---- 5 Stars
11. 05% GLRBX James Balanced Cons. --- 5 Stars
12. 04% PHO Power Shares Water Fund
13. 05% PZJ Power Shares Zacks Small Cap Portfolio
14. 04% GCS DWS Global Commodities Fund
15. 05% RYJUX Rydex Inverse Gov Long Bond
16. 05% RYMFX Rydex Managed Futures Strategy

note: click on symbol for Morningstar tear sheet

A Word About Mutual Funds

Blog Synthesis: Mutual Fund Investing

Now read: Reverse Asset Allocation: Alternatives At The Core

Market Wrap Links for Week Ending 5/23:

Weekly Wrap-up - Crude and Housing Data Sink U.S. Stocks, Dow Drops 3.9%

Market Recap: Dow Takes Triple-Digit Nosedive, but Holds Key Support

Real Estate Weekly: from Marketwatch for May 23

Market Wrap (May 23, 2008) from Canslim.net

Friday's Tech Winners & Losers & Health Winners & Losers

The week's top news and analysis, May 19 - May 23

TheStreet.com - Stocks Fall Into Puddle of Oil

TheStreet.com - This Week's ETF Winners & Losers

How different investments did this week from the WSJ

Friday's biggest stock gainers and decliners

Market Wrap from Financial Sense

Market close for May 23, 2008 - Stock Market Status from CXOAG

The Wall Street Journal's: The Markets Data Center with closing numbers.

ALPHA TRENDS: Video Technical Analysis Review of Stock Market 5/23/08

U.S. stocks end week sharply lower as oil surges from MarketWatch

MARKETS AT A GLANCE for Friday

Inflation Proof Your Retirement with - Real Estate

Bill Cara Market ReCap

Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Nearly 3% and 8% on the Week

Gold spot chart (Interactive link)
Silver spot chart (Interactive link)
Platinum spot chart (Interactive link)
Palladium spot chart (Interactive link)
NYMEX Oil near futures contract (Interactive link)
$CRB Index (Interactive link)
$USD Index (Interactive link)

Homes are biggest bargain since 2004

Two towers in new downtown Scottsdale proposal
from the East Valley Tribune, reports that Scottsdale's new downtown plan proposal would allow Westcor and Scottsdale Healthcare to build towers approaching the height of the Scottsdale Waterfront condos. The buildings would be an estimated 110 to 132 feet tall. Also included in the plans is the expansion of the downtown boundaries in three locations, giving greater zoning flexibility in allowing up to 65-foot tall residences or a 72-foot high hotel closer to established residences. According to Westcor and Scottsdale Healthcare, they will involve the community in whatever plans they pursue.

NAR Applauds Senate Housing Deal
from the Realtor Magazine Online, reports that according to the National Association of Realtors, a Senate's committee's approval of a plan to allow the federal government to insure up to $300 billion in refinanced loans for home owners in financial distress is a major sign of progress. NAR President Richard Gaylord said in a statement, “We are pleased with the overall direction of this bill. This legislation is good for both the housing market and the home owner." The Senate Banking Committee voted Tuesday to pass the Federal Housing Finance Regulatory Reform Act of 2008. Gaylord added, “We look forward to working with the House and Senate to finalize an aggressive bill that will ensure that every American who can afford to own a home and aspires to do so will have that opportunity, and that every American who responsibly owns a home is able to keep it.”

Homes are biggest bargain since 2004
from CNNMoney.com, reports that according to the latest Housing Opportunity Index released by Wells Fargo and the National Association of Home Builders (NAHB), 53.8% of all new and existing homes sold nationwide during the first three months of 2008 were affordable to families earning the median household income of $61,500. NAHB president, Sandy Dunn, said in a press release, "Three factors combined to substantially increase housing affordability. Mortgage rates returning to near the record low levels of a few years ago, a $2,500 rise in family income nationwide (from 2007 to 2008) and lower house prices."

Good News From Lenders
from RealtyTimes.com, reports that the best news in real estate the first few months of 2008 has concerned mortgages. Interest levels have continued to hover near 6% for 30-year fixed-rate loans, people who want to buy or refinance at this time will find interest rates not terribly far-removed from the historic lows seen in 2003. The mortgage rates today are important because they show that lender confidence in the U.S. real estate market remains strong. Lenders are willing to extend credit to U.S. homeowners, despite the large number of foreclosures. With the new lender policies, be prepared for more paperwork, larger down payment requirements when you buy and the need for more equity when you refinance.

Pre-Market Open News & Links for Friday

U.S. stock futures back under pressure as oil resumes rise

"S&P 500 futures fell 5.5 points to 1,387.70 and Nasdaq 100 futures fell 5.5 points to 1,961.00. Dow industrial futures fell 53 points as oil prices climbed higher, putting consumer-discretionary firms including Royal Caribbean Cruises and Six Flags under further strain."

Gold for June delivery dropped $10.30 to end at $918.30 an ounce on the New York Mercantile Exchange coming under pressure as the dollar rose against other major currencies and oil prices declined. July silver was higher overnight as it extends this week's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near- term. If July extends this week's rally, the reaction high crossing at 18.545 is the next upside target. First resistance is Thursday's high crossing at 18.240. Second resistance is the reaction high crossing at 18.545. First support is the 10-day moving average crossing at 17.323. Second support is the 20-day moving average crossing at 17.021.

The Bank Index ($BKX +1.21%) recently breached its 50-day moving average line again, and prior chart lows in the $73-75 range form an important chart support level. Deterioration in the financial group has contributed considerably to the market's woes in the past year, and not surprisingly, weakness in financial shares had a big impact this week as the latest market rally came under pressure and entered a correction outpaced the Broker/Dealer ($XBD +0.43%) and Retail ($RLX +0.23%) indexes, all of which were positive influences on the major averages Thursday. The tech sector also posted modest gains as the Semiconductor ($SOX +0.80%), Networking ($NWX +0.81%), Internet ($DOT +0.65%), and Biotechnology ($BTK +0.98%) indexes ended unanimously higher. The Healthcare ($HMO +1.99%) group was a standout gainer. Meanwhile, commodity linked groups pulled back as the Oil Services ($OSX -1.34%), Integrated Oil ($XOI -0.71%), and Gold & Silver ($XAU -1.02%) indexes fell.

From 24/7 Wall St.:

• Media Digest 5/23/2008 Reuters, WSJ, NYTimes, FT, Barron's
• Top 10 Pre-Market Analyst Calls
• Asia Markets 5/23/2008 (DCN)(CHL)(CN)

From Trading Markets:

• 7 Stocks You Need to Know for Friday
• 5 Oversold Stocks for Traders
• PowerRatings Danger Zone: CQP, FED, ROG

From MarketWatch:

• Upgrades / Downgrades / Initiations for today
• Stocks in focus for Friday
• Thursday's biggest stock gainers and decliners

Wall Street Breakfast - What you need to know in early trading today.

Earnings Surprises Up & Down from zacks

The Trend Trader for Friday from Barchart.com

Solar Energy Outshines Rest Of ETF Universe from IBD - There were only 16 high-ranked companies from the CANSLIM.net Leaders List that made new 52-week highs and appeared on the BreakOuts Page - {limited sign up is free}

The public will believe anything, so long as it is not founded on truth. – Dame Edith Sitwell (1887 – 1964)

Canslim.net Morning Comment and Links (for traders)

MORNING MARKET COMMENTARY
- Thursday, May 22, 2008
Distributional Pressure Trimming Market's Recent Gains

- Kenneth J. Gruneisen, CANSLIM Certified, Registered Principal, Source Capital Group, Inc. (Members NASD, SIPC)

The benchmark Standard & Poor's 500 Index experienced its largest two-day drop since March as the major averages stalled near their respective resistance levels. Wednesday's volume totals were reported higher on both major exchanges which marked another distribution day for the major averages, raising concerns. Decliners trumped advancers by a 2-to-1 ratio on the NYSE and on the Nasdaq exchange. There were 90 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, which was higher than the 56 on the prior session. The total number of stocks making new 52-week highs outnumbered stocks making new 52-week lows on the NYSE, but new highs still trailed new lows on the Nasdaq exchange. Those results underscored a recurring theme which has been evident in recent weeks where the NYSE Advance/Decline line has turned higher while the Nasdaq Advance/Decline line flattened but did not turn up as convincingly. {limited access is free}

Top 10 Pre-Market Analyst Calls from 24/7 WallSt.

STOCKS BREAKING ABOVE AND BELOW THEIR 50 DAY & 200 DAY M.A.

Media Digest 5/22/2008 Reuters, WSJ, NYTimes, Barron's

Upgrades / Downgrades / Initiations from the WSJ

Earnings Surprises Up & Down from zacks

Wall Street Breakfast in Seeking Alpha by SA Editors on May 22nd
What you need to know in early trading today.

Wednesday's biggest gaining and declining stocks

7 Stocks for Thursday by Trading Markets

Stocks in focus for Thursday MarketWatch

The Trend Trader for Thursday, May 22

Thursday's Bond Outlook: Oil's the Critical Headwind

Prophet.net's technical analysis glossary

The Wall Street Journal as mini-Bloomberg: The Markets Data Center has information on everything from currencies to commodities, from indexes to calendars, from past and future POs and their performance to even a really good Economic Indicators Archive. The Journal even has a mutual fund screener. It is weak on company screeners but Yahoo Finance has one.

June gold was lower overnight due to profit taking as it consolidates some of this week's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, April's high crossing at 956.20 is the next upside target. Closes below the 20-day moving average crossing at 885.30 are needed to confirm that a short-term top has been posted. First resistance is the overnight high crossing at 935.40. Second resistance is April's high crossing at 956.20. First support is the 10- day moving average crossing at 896.50. Second support is the 20-day moving average crossing at 885.30.

Fed Minutes Suggest Rate Cuts Are Done

Minutes of the April 29-30 Federal Reserve Board meeting, where the central bankers cut the key Fed Funds rate by a quarter point to 2%, show this participant angst about real estate …

The housing market had continued to weaken since the previous meeting, and participants saw little indication of a bottoming out in either housing activity or prices. Housing starts and the demand for new homes had declined further, house prices in many parts of the country were falling faster than they had towards the end of 2007, and inventories of unsold homes remained quite elevated. A small number of participants reported tentative signs that housing activity in a few areas of the country might be beginning to pick up, and a narrowing of credit risk spreads on AAA indexes of sub-prime mortgages in recent weeks was also noted. Nonetheless, the outlook for the housing market remained bleak, with housing demand likely to be affected by restrictive conditions in mortgage markets, fears that house prices would fall further, and weakening labor markets. The possibility that house prices could decline by more than anticipated, and that the effects of such a decline could be amplified through their impact on financial institutions and financial markets, remained a key source of downside risk to participants’ projections for economic growth.

The Fed also released updated quarterly economic forecasts with the April minutes. The central tendency of officials' forecasts is for gross domestic product to rise between just 0.3% and 1.2% this year, down from the last forecast of growth between 1.3% to 2%. Officials also raised their forecasts for the unemployment rate and both headline and core inflation as measured by the price index for personal consumption expenditures.

To read the rest of the minutes, CLICK HERE!

The Federal Reserve also reported that delinquency rates rose sharply in Q1 in all categories - except agricultural loans (higher food prices helps).

Under $10M Commercial RE Holding Up

Apartment smoking bans -
Apartments.com’s latest tenant survey says renters — even those who don’t smoke — aren’t that crazy about smoking bans.

Of those surveyed, 44.7% opposed the idea of making smoking in apartments illegal while 39.1% supported a ban. Nearly two-thirds of those surveyed — 61.9% — were non-smokers.

About a third of the respondents — 31.8% — said a property management company shouldn’t decide that you can’t smoke in the privacy of your own apartment. Another 22.2% didn’t mind people smoking in their own place as long as it didn’t affect them. (CLICK HERE to see the survey.)

The survey comes as more cities are considering bans on smoking in apartments. Calabasas was the most recent one in California. In January, the Calabasas City Council expanded its ban on smoking in apartment common areas to require landlords to set up outdoor areas for smokers. Belmont in the Bay Area also passed a ban.

Bulls vs. Bears: Who Wins?
“James A. Stolpestad, managing director at GE Real Estate, New York: “Good, well-maintained properties in good markets will hold their values.” As far as how all of that translates in dealmaking: “The under $10-million [property sale] market is holding up,” Bernard Haddigan, managing director of Marcus & Millichap’s national retail group, said. “Over $10 million is off by upwards of 60% in transaction velocity.” (Globe St., May 20th)

“There is no desperation in the marketplace. That is based on positive, fact-based information.” - Hessam Nadji, the firm’s managing director of research at Marcus & Millichap. (Globe St., May 20th)

Top 10 Sectors & Stocks by Relative Strength (weekly update)

Use this tool to buy the right sector ETFs or their leading stocks by RS:

Weighted - Industry Name - Chart - Top Names
Alpha

+89.35 Agricultural Chemicals Chart : TNH, CMP, AGU
+62.66 Independent Oil & Gas Chart : MXC, CKX, HUSA, FPP, PDO, MMR
+49.94 Steel & Iron Chart : ZEUS, GGB, SIM, MEA, SID, TS
+41.21 Oil & Gas Drilling Explor Chart : ENT, UNT, VNR, CHQ, WHT, WLL, VQ
+33.99 Metals Fabrication Chart : X, MLI, VMI, MINI
+28.65 Industrial Metals Mineral Chart : ANR, PCX, ARLP, NRP, JRCC
+24.28 Appliances Chart : NPK, SPW
+24.24 Major Integrated Oil Gas Chart : CVX, COP, TOT
+23.50 Oil & Gas Equipment Svcs Chart : OIS, CPX, BAS, EXH, WG
+21.14 Farm Construction Machnry Chart : CAT, JOYG, BUCY

Ranking of the stocks in each sector is done via Weighted Alpha, which is a rating of growth patterns in a one-year period. The calculation is such that the most recent prices have a higher weighting in the calculation of the Alpha. The higher the weighted alpha, the larger the growth. A stock whose price has not changed in the period will have a small weighted alpha. A stock whose price has dropped over the year will have a negative weighted alpha.
(click on the sector name above to see the entire list.)

RELATED LINKS:

Why RSI is one of the best short-term indicators & RSI DEFINED

Top 100 Stocks for May 20th By Relative Strength

Morpheus offers a very useful ETF guide

MARKETS AT A GLANCE

Indices ETFs by Relative Strength

ETF Gainers, Decliners, & Most Actives from the WSJ

Stocks by Sector/Industry plus: SECTOR ETFs Summaries

According to Benjamin F. King in his “The Latent Statistical Structure of Securities Price Changes,” 50% of a stock’s price movement can be attributed to the overall movement in the market, 30% to the movement in its sector and only 20% on its own. So, if you must pick individual stocks, use fundamental analysis for stock selection and technical analysis for the timing of purchasing or selling. Do not ignore market risk, however.

An interesting oil site is McDep.com --which dubs itself as independent energy valuation.

TODAY'S OPEN: DOWN

Major Averages End Session With Mixed Results
PICTURED BELOW: The S&P 500 Index closed one point below its 200 DMA line on Monday. The major averages opened stronger but ended mixed after the initial bullish enthusiasm waned in afternoon trade. The weak close added concerns, but the action dd not suggest that institutional investors were aggressively dumping stocks. Volume was reported slightly lower and below average on the NYSE while slightly lower and above average on the Nasdaq exchange. Decliners led advancers by a 17-to-15 ratio on the NYSE and by an 17-to-12 ratio on the Nasdaq exchange.

"S&P 500 futures fell 6 points to 1,423.80 and Nasdaq 100 futures fell 7.5 points to 2,018.25. Dow industrial futures fell 49 points as Home Depot reported a 66% profit fall and as other leading retailers are expected to show the impact of the depressed housing market and rising gasoline prices on spending."

Commodity linked areas posted modest gains as the Gold & Silver ($XAU +0.57%), Integrated Oil ($XOI +0.97%), and Oil Services ($OSX +0.53%) indexes edged higher. The Healthcare ($HMO +0.44%) group also posted a modest gain. However, weakness in the financial groups including the Broker/Dealer ($XBD -1.27%) and Bank ($BKX -0.41%) indexes created a slight drag on the market averages, which slumped back under its 50-day moving average (DMA) line again. The tech sector backpedaled as the Networking ($NWX -1.16%), Semiconductor ($SOX -0.79%), Internet ($DOT -0.25%), and Biotechnology ($BTK -0.12%) indexes ended the session in the red, but not terribly. The Retail Index ($RLX -0.56%) also closed with a modest loss.

LINKS:

From 24/7 WallSt.:
Media Digest 5/20/2008 Reuters, WSJ, NYTimes, FT, Barron's
Top 10 Pre-Market Analyst Calls
Asia Market 5/20/2008 (DCM)(CHL)(SNP)

7 Stocks You Need to Know for Tuesday
Tuesday's list includes: Amazon.com, SanDisk, and Texas Instruments.

Wall Street Breakfast in Seeking Alpha by SA Editors on May 20th
What you need to know in early trading today.

The Trend Trader for Tuesday May 20th from BarChart.com

Stocks in focus on Tuesday from MarketWatch

The Test of Market Strength by Gary Kaltbaum

Monday Sector Strength from HeadlineCharts.blog.com

July silver was higher overnight as it extends this month's trading range. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. Closes above the reaction high crossing at 17.370 are needed to confirm that a short-term low has been posted. If July renews this spring's decline, the 62% retracement level crossing at 15.352 is the next downside target. First resistance is Monday's high crossing at 17.295. Second resistance is this month's high crossing at 17.370. First support is the 50% retracement level of the 2007-2008-rally crossing at 16.527. Second support is the reaction low crossing at 16.055.

Crude oil, heating oil and unleaded gasoline are overbought but there is no way of knowing where the top might be in these markets.

Solutions to Achieving Outperformance in a Low Return World

100 Best places to live and launch 2008

Southland home sales highest in eight months
Southern California home sales surged last month to the highest level since August as bargain shoppers took advantage of price slashing. Although some higher-end costal markets also posted gains, the swell in transactions mainly reflects more sales of homes under $500,000 in inland areas where depreciation and foreclosures have been greatest.... full story

A DataQuick breakdown of April single-family house sales by price shows that low-priced houses outsold those at the high end of the price spectrum. There were 973 houses that sold for $500,000 or less last month, compared to 712 that sold above $600,000. The number of houses that sold for $500,000 or less increased 55% last month, up from 629, DataQuick figures show. And the number selling below $400,000 doubled to 549, up from 263 in April 2007. At the same time, there were 47% fewer houses selling last month above $600,000, down from 1,341 in April 2007. The middle? The number of houses selling for $501,000 to $600,000 decreased 32% in April.

Bay Area home sales edge up in April
Bay Area home sales edged up from a seven-month run of record lows last month, indicating that mortgage availability is improving and that an increasing number of fence sitters have decided they like today's lower prices. . . full story

Scottsdale is No. 25 on best-places list
from The Arizona Republic, reports that according to Fortune Small Business magazine, Scottsdale is ranked No. 25 among "The 100 Best Places to Live and Launch." Only two other Arizona communities, Oro Valley at No. 44 and Prescott at No. 92, made the list. The magazine said writers and editors looked for "towns that combine a great business environment with alluring leisure opportunities." Writer/editor Maggie Overfelt said Scottsdale fit the best-places bill with its large entrepreneurial community and high volume of tourist traffic, capped off by the ability to hike Camelback Mountain, golf, and dine at five-star restaurants. Other Scottsdale "pros" include its culture and nightlife. Entire list HERE

Home Sales, Prices Seen Rising in Late '08
from Realtor Magazine Online, reports that according to NAR Chief Economist Lawrence Yun, home sales have stabilized over the last seven months and should increase slightly in the second half of 2008. He added, “I believe 2008 will be the year when we have to clean up and recover from the subprime mess." Yun also said while sales should begin to grow later this year, real improvement in the housing market won’t happen until 2009, when sales should climb to 5.71 million units. Thanks to Fed rate cuts, current borrowers with adjustable mortgages are in better shape. Some adjustable loan borrowers may actually see their resets produce lower payments. Yun said, "The Fed has done its job on resets; now it’s up to Congress to encourage the home buying that will help stabilize prices.”

Housing starts post surprising rebound
from MSNBC.com, reports that during the worst downturn in housing in more than two decades, construction of new homes posted the biggest increase in more than two years in April. According to the Commerce Department, housing construction rose by 8.2% in April to a seasonally adjusted annual rate of 1.03 million units. The growth came from a big increase in apartment construction. Apartment building, defined as two or more units, jumped by 36% to a seasonally adjusted annual rate of 340,000 units, while the larger single-family sector dropped by 1.7% to an annual rate of 692,000 units. Considered a good sign of future activity, applications for building permits also recorded an increase in April, rising by 4.9% to 978,000 units. This was the first gain in permits in five months. Read: When Housing Starts Are Stronger Than Expected from Bespoke

S.F. luxury home values faring better than those in L.A., San Diego [Business Times]