STOCKS AND COMMODITIES JUMP AS DOLLAR DROPS -- LARGE CAP INDEXES HIT NEW HIGHS FIRST -- SILVER, PLATINUM, AND COPPER BREAKOUT -- COAL STOCKS LEAD ENERGY COMPLEX HIGHER -- BRISTOL MYERS SQUIBB BREAKS OUT -- CHINA LEADS EMERGING MARKETS HIGHER

LARGE CAPS HIT NEW HIGHS FIRST... My Friday message wrote about a new recovery high by the Dow Industrials reflecting investor preference for large cap stocks. A buying spree on Monday has pushed several large cap index to new highs as well. Charts 1 and 2 show the S&P 500 Large Index and the Nasdaq 100 Index clearly at new recovery highs (the NDX represents the largest 100 stocks in the Nasdaq Composite). It now appears most other stocks indexes are heading to new highs as well. In a repeat of last Monday's performance, a falling dollar is pushing more money into stocks and commodities. Virtually all commodities are sharply higher today along with basic material, energy, and precious metal stocks. All stocks sectors are in the green. Sector SPDRs reaching new highs include consumer discretionary, technology, consumer staples, and healthcare. Coal stocks are very strong.

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COAL STOCKS LEAD ENERGY SECTOR... On September 22, I wrote an article showing that coal stocks were leading the energy complex higher. While the Energy SPDR (XLE) has gained 25% during 2009, the Market Vectors Coal ETF (KOL) has surged 140%. Chart 1 shows the KOL hitting a new 52-week high again today. Its relative strength (black) line is doing the same. One of today's strongest energy stocks is Peabody Energy. Chart 4 shows BTU approaching a 52-week high. An even stronger coal chart belongs to Massey Energy. Chart 5 shows MEE already at a new annual high. Energy stocks are rising along with energy prices as the dollar falls. Chart 6 shows the United States Oil Fund (USO) bouncing impressively off initial chart support near 39.

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METALS HIT NEW HIGHS... Gold is climbing to another record high today. Other metals are breaking out as well. In the precious category, Charts 7 and 8 show Silver iShares (SLV) and Platinum ETN (PTM) hitting new recovery highs as well. Among industrial metals, Chart 9 shows copper prices (JJC) doing the same. Chart 10 shows the DB Commodities Tracking Index (DBC) bouncing within a bullish consolidation pattern. Stocks are rallying along with their commodities. Both are benefiting from a falling dollar.

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BRISTOL MYERS SQUIBB BREAKS OUT ... Last Tuesday's article showing strong chart action in large pharmaceutical stocks. I identified my favorite chart pattern belonging to Bristol Myers Squibb because the stock appeared on the verge of a very bullish breakout. I'm including it here again so that today's bullish action doesn't get lost in the day's coverage of so many strong stocks. Chart 11 shows BMY surging nearly 6% on very strong volume and exceeding its early 2009 high near 23. Chart 13 shows Pharm Holders (PPH) testing the high formed during the summer of 2008.

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FOREIGN MARKETS REMAIN STRONG... The positive correlation between rising foreign currency markets and foreign stocks remains very much intact. Chart 13 shows the Australian Dollar hitting a new recovery high today and remaining one of the world's strongest currencies. A rising XAD is also bullish for commodities. Chart 14 shows EAFE iShares nearing a test of its October high. Chart 15 shows Emerging Market iShares (EEM) already hitting a new recovery high. A new recovery high in China is also boosting global stocks and commodities (Chart 16).

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