BLUE CLIPS CONTINUE TO OUTPERFORM TECHS -- OIL HITS NEW POSTWAR HIGH -- EXXON MOBIL CHALLENGING OCTOBER HIGH

DOW CLIMBS TO NEW RECOVERY HIGH... Blue chip stocks continue to do better than the Nasdaq market. The Dow gained 15 points today to hit another recovery high for the year. Most other stock indexes also closed higher. Big board breadth was positive. The Nasdaq market lost 3 points and continues to lag behind. Nasdaq breadth was negative. Volume was light throughout the market. Weakess in the Semiconductor Index continues to weight on the tech sector. The biggest gainers on the big board were in Energy and Materials, which reflected strength in commodity markets. The dollar fell to another low against the Euro. That boosted most commodity prices. Gold gained $4.30. Energy markets were led by natural gas and heating oil. Crude oil gained .50 cents to hit a new postwar high. Naturally, that's keeping a strong bid in the energy sector.

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DOW LEADERS... Two of the Dow's pacesetters were Boeing and Exxon Mobil. Boeing cleared its November high on strong volume to record a new 52-week high. XOM was reflective of new strength in the oil patch. The big oil stock is close to challenging its October high. A close through that barrier would be a new yearly high. The gains in Wal Mart reflected an oversold bounce in the beaten down retail sector. The big retailer has been badly discounted recently and is still in a downtrend. Two other Dow leaders today were Alcoa and Home Depot.

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CRUDE OIL HITS POSTWAR HIGH... Last week we showed crude oil prices closing over $33 for the first time in months. Today's advance puts it at another recovery high. Its weekly chart shows this to be the highest close for crude oil since March. That was just after the Iraq war started. Up until recently, energy markets lagged behind the major rally in commodity markets. Over the past month, they've started bull moves of their own. That's why the energy sector has done so well this month both on an absolute and relative basis -- as shown in Chart 9.

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