The NASDAQ Composite was the only major index to continue its winning streak this week although the major indexes did close out the week with an accumulation day on Friday. The damage was done on Monday when the Bank of America increased its provision for bad loans causing concern that the financial sector was not as healthy as had been supposed following first quarter profits at JP Morgan, Goldman Sachs and Citibank. This coincided with the Index of leading Economic Indicators predicting further declines for the economy. Although the financial sector, and the rest of the markets, moved higher later in the week, it was not sufficient to overcome Monday's deficit.

The exception was the technology sector which scored three accumulation days in the week as several major technology companies reported better than expected earnings. Among these were major players Apple, Microsoft, AT&T and Amazon. ORACLE, which announced a takeover of Sun Microsystems on Monday, attempted to breakout on Friday but slipped back on profit taking before the close.

Looking ahead, apart from technology, the remainder of the markets seem to be moving more or less in lockstep with the financial sector. Treasury reported on Friday that  “Most U.S. banking organizations currently have capital levels well in excess of the amounts required to be well capitalized” so for the moment this sector has stabilized but we still wait for the results of the stress tests to be announced, which is due on May 4. The stress tests are designed to assess the ability of the banks to withstand further losses and if the IMF's assessment that the global losses will amount to $4.1 Trillion is correct, then there is certainly more stress to come. This means that while there is stability and increasing confidence at the moment, there could be downward pressure on the banks, and the rest of the market, in months to come.

The number of breakouts and the gains they make continued to improve this week There were twenty confirmed breakouts compared to twelve last week. They made average intraday gains of over 10% and closed the week with an average gain of 5.7%.

Our Tradewatch strategy has languished somewhat over the last two years after proving very profitable in 2007. This was developed for my personal use as I choose not to rise at 3:30 am to follow the markets in real time. Hence I developed the Buy at Open and Buy on Breakout strategies which allow an order to be placed the night before the next day's trading. As the markets have recovered these strategies are starting to prove profitable again. Positions currently open on these strategies are:

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