We finished last week on a high note as the S&P 500 is now trading above its April 2011 high, and has technical support below at the 1353 level. Even technology finally made a push through 2600 in the Nasdaq-100 and held there, as this was a level that has displayed formidable resistance in previous weeks.
We have pointed out leadership in both the technology sector as well as financials, but we note that Financial Select Sector SPDR (NYSEArca: XLF) seems to have stalled out recently, failing to climb to new 2012 highs last week.
On a cautious note from a technical standpoint, despite the major indices registering new highs last week, our market technician David Chojnacki pointed out that RSI levels are moving to over bought conditions and weak MACD’s exist for all three major indices as well (S&P 500, Dow and Nasdaq).
ETF and index options activity was relatively light throughout last week, although we continue to see bullish posturing in options in metals, specifically silver via iShares Silver Trust (NYSEArca: SLV) calls. [Silver ETFs at Five-Month High]
SLV impressively took another leg up higher last week, crossing and closing above its 200 day moving average for the first time since September of last year.
In similar fashion, gold ETFs rallied to four month highs last week as well on strong trading volumes.
From an asset flows standpoint last week however, it was relatively quiet on the inflows side, although oil related equity ETFs turned in strong showings.This is not terribly surprising given the continued run in Crude Oil prices amid tensions in Iran and analysts forecasting much higher gasoline prices going into this summer.
We note the presence of upside call buyers in WTI Crude Oil futures, specifically the April 140 calls late last week as well, so oil related commodity ETF and ETN products were obviously strong last week as well as equities in the Drilling and Services sectors.