GLOBAL STOCKS AND COMMODITIES JUMP AS DOLLAR DROPS -- 50-DAY MOVING AVERAGES CONTAIN PULLBACK -- GOLD STOCKS HIT NEW HIGHS -- SEMICONDUCTORS TRY TO RETAKE 50-DAY LINE -- UTILITIES ARE BREAKING OUT

GLOBAL PULLBACK FINDS SUPPORT AT 50-DAY LINES... As fears about Dubai reside, global stocks have regained their upside momentum. All three U.S. stock indexes found support at or above their rising 50-day moving averages as shown in the first three charts. That has removed any immediate threat to the existing uptrend. The same is true of foreign stocks. Chart 4 shows EAFE Index iShares gaping back above their 50-day line, while Emerging Market iShares in Chart 5 are doing the same. That erases the selloff that took place last Friday. Commodities (and related stocks) are jumping along with stocks. Some of the strongest groups are materials, gold, and energy. A weaker dollar is also giving a big boost to most foreign currencies.

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EURO CLIMBS ALONG WITH COMMODITIES... Chart 6 shows the Euro gapping higher after bouncing off its 50-day average. That means that the dollar is falling which is bullish for commodities and related stocks. Chart 7 shows the DB Commodities ETF (DBC) moving up to challenge its October high near 25. That's giving a big boost to commodity-related stocks. Chart 8 shows the Market Vectors Gold Miners ETF hitting a new 52-week high. Chart 9 shows the Materials SPDR close to doing the same. Chart 10 shows the Energy SPDR consolidating above its 50-day average. That favors a move to the uspide in energy shares.

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THE SOX IS HAVING A STRONG DAY ... Three market groups that have been lagging behind the recent rally include banks, small caps, and semiconductors. The Bank Index continues to do so (Chart 11). Small caps are bouncing, but remain below their 50-day line (Chart 12). Semiconductors, however, are up more than 2% and may regain their 50-day line (Chart 14).

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UTILITIES ARE BREAKING OUT... I've been writing a lot lately about traditionally defensive groups that are starting to attract new money, which include consumer staples, healthcare, and telecom. We now have to add utilities to the list. Chart 14 shows the Utilities SPDR (XLU) on the verge of breaking through the 30 level for the first time in more than a year. That would represent a bullish breakout. In addition, its relative strength ratio (solid line) is starting to turn up for the first time since March. Once again, that suggests to me that investors are continuing to move some funds into traditionally safer stocks that pay dividends.

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