Weekly Report

Transportations did well despite the rise in oil, yet another sign of economic strength. TLT probed the downside but traded up at the end of the day, a plus. We would be selling oil stocks (except oil services) slowly into strength, trying to get to an underweight by the end of June/July.

Traders should use strength at the end of the week to take some profits. We still are forecasting a drop in rates in the second part of 2026.

More advance on oil would suggest a test of the recent high – be careful of this. We would move some money from XLE to OIH, as that should have better potential long-term.

We would use pullbacks in here to add to position, realizing that a secondary low or retest is possible, but that not all stocks will pull back. On SPY, a close below 690 would be a concern, and on QQQ 620.

This rally might be starting early – we are not sure this is the case, however, and trader should use this rally to raise cash into Friday. We have been focusing on Small Cap Value, and it looks to be time to add growth back as well. We think that Small Cap will be a leader in the second part of 2026.

When you take a “10,000” foot view of things it is amazing that we are not down more. We would buy OIH and CRAK on dips if oil prices decline and want to have these in portfolios as part of an energy allocation.

This might turn into a short-term rally and then sell on the news event. TLT still looks to rally and our targets in the 92-area remain.

We still are looking for another decline into the end of April. On last Thursday’s Conference Call we discussed the possibility that Small Cap stocks perform well in the second half of 2026, perhaps even becoming new leadership.

Indicator formation suggests there should be more downside. We still think there will be problems into April.

Our plan has been to nibble at attractive names with the idea that we will be invested around April expiration and into May. IYW could test 166, and if that breaks a test of 158 is possible. All rate indexes broke out of long-term downtrends that had been in effect since 1995.