Securities Research Services

Wednesday, May 31, 2006

Fear is in the Air Putting in a Floor

The VIX, which we have been discussing over the past couple of weeks produced more very interesting and useful information yesterday. After giving back most of its recent gains over the past week, indicating that investor complacency was once again returning, yesterday's sharp market reversal caused the volatility index to make its sharpest reversal ever. The price on the index jumped an incredible 23% in just one day. Consider the fact that this index measures investor fear, we can ascertain that fear levels jumped through the roof yesterday as stock prices gave up most of their recent gains. Moreover, the bearish posture that traders took on yesterday was also reflected in the QQQQ put/call ratio. Options traders, the group that is so often wrong at market turns, bet 4-1 in favor of more downside. Considering the fact that the QQQQ found strong support last Wednesday, add in an overly bearish crowd that is running scared and you have the makings of a bear trap. Our scans today revealed a great deal of very nice short setups and we can certainly empathize with the temptation to short this market. Panning back to the weekly views though we find only very oversold stocks that are at or near support levels. We saw the same view last October right before the market reversed strongly. We will not make a prediction at this point for a market rally like the one that ensued from October's lows, but we will say that shorting this market is very risky. If prices go below last Wednesday's lows and volume picks up on the slide, then we will concede that the crowd got it right this time and that the market is moving from a minor to a much more significant correction. Right here, right now, history tells us that it is unwise to place that bet.

Monday, May 29, 2006

Two Scenarios, Which Will Play Out?

Last week the market bounced off a vastly oversold condition. Breadth was great as nearly everything but the semi conductors went along for the ride. Problematic was the lack of volume on the move. After Wednesday's very strong volume reversal day, Thursday's and then Friday's volume lost momentum and Friday's volume was less than half that of Wednesday's. More troublesome is the fact that indices are now nearing resistance levels. Theoretically a low volume pull back into resistance is an ideal short set up. In this case it may or may not be. Let's take a look at the QQQQ chart. Resistance on the QQQQ is roughly $39.60-$39.75. If the price can overcome this area this week, we should see a retracement back up near the broken 200-day average at $40.50, while the S&P and Dow test broken trend lines. Such a scenario would set up an ideal short and would allow us to keep open longs for a few more days. However, if the QQQQ rolls over at current overhead resistance, we are most likely going to see prices retest support just above $38.50. A roll over from the current level would not be the best short set up since strong support is just below. Instead it would most likely help build a much stronger base of support for a much stronger rally. Such a scenario would set up an ideal long trade. Decreasing volume into resistance last week suggests that we will see a retest of support this week, leading to a much better long set up as we move into the end of the month buying window.

Friday, May 26, 2006

Be Confident Here, Support is Your Friend

Price was good yesterday and breadth figures were great. Volume was wanting though. While we believe that an intermediate bottom is now in place, there is a decent chance that bears will once again give the bulls a scare and take prices back to support once more. If so, these dips should be used as buying opportunities. Be confident here and don't give up shares just above support. Probabilities of the market heading lower than Wednesday's lows before decent gains are made on the upside are very, very small. Keep this in mind if the hedge funds and day traders once again shake the tree here. Note: TMY is trading right at support on its long term up trend. Keep an eye on it here. We would look for it to make a nice reversal to the upside from this level. Today we will stand aside and let it prove itself.

Thursday, May 25, 2006

Opportunities Abound

An intermediate bottom should now be firmly in place. Yesterday marked the highest volume trading on the QQQQ and SPY in the history of those indices. Bearish sentiment readings prior to yesterday (a contrarian indicator) were at all time lows, and the VIX continued to spike higher. All of these readings spell "reversal." We have some theories about how this reversal will play out. We should be looking at a nice uptrend that will last over the next two weeks at least. The blue chip indices might even move back up to test their recent highs. However, we believe that sellers will be looking for another opportunity to short once this rally is played out. This we believe spells ongoing opportunity. Consider this. Sentiment readings and market volatility levels are spiking on the bearish side as we trade near a bottom of a corrective move. Once short covering sparks a rally back higher, we would expect that complacency levels will increase and bulls will once again become overly optimistic. A lower high on the Nasdaq at that point however would really take the wind out of their sails and a second frightening leg down should then follow. If it plays out according to our projections, we should see a very nice opportunity to make quick money going up, going down, and then subsequently will find that a serious long term buying opportunity has emerged. This is why we have embraced the breakout in the VIX as a very friendly development.

Wednesday, May 24, 2006

Shorts are in danger of giving back some of their profits

Bears have continued to remain aggressive even though stocks are at extreme oversold levels. Yesterday's rally was used as an opportunity to open more short positions. Likewise, the options market shows that participants are overly bearish, giving a contrarian buy signal. Think about it like this. When a stock or the market have recently made a strong extended move higher, it is not at all uncommon for traders to become overly bullish, using every dip as a buying opportunity. Bulls enthusiastically buy calls in anticipation of a fleeting upside breakout even when stocks are vastly overbought. This is what has occurred yesterday, only in reverse. Yes it is possible that the bears could get a slight spike lower, but such a spike would only embolden smart money to buy more aggressively. Shorts were right last week. This week they may find that newly opened short positions fuel a rebound rally as they are forced to cover. Today is a good day to be patient. If the market dips temporarily lower, we should see another nice mid day reversal. If the market firms up at the current price, we will have a solid floor to buy from. There should be no reason to exit in panic here, but likewise, there should be no hurry to enter either. A "V" type rally that regains losses in one big burst is very unlikely here so keep your emotions at bay.

Tuesday, May 23, 2006

More on the VIX

Yesterday we discussed the VIX, market volatility index. If you recall, a decreasing VIX means that market volatility is contracting. Over the past two years market volatility has been decreasing and over the past year volatility levels moved down to early 1994 levels. Consider that the VIX is also a good measure of investor fear. Fear levels have been very low to the point of complacency over the past 12 months. Smart investors take advantage of the inefficiencies created by emotions. Since emotional levels have been at multi decade lows it has been harder and harder to find inefficiencies to exploit. Alas, this week we experienced an overwhelming breakthrough on the VIX. Note the monthly chart view of the Volatility index below: This is good news indeed. The spike represents an injection of fear in the market that has wiped out complacency in a matter of days. We are already seeing new and promising set ups emerge as a result. Today's market: The market is now basing nicely and yesterday traders were even whispering the words "Black Monday." More frightening words were never spoken and this is just the kind of overly bearish positioning that the market needs to put in an immediate bottom. Like a beach ball being held under the water, we should see prices shoot sharply higher in a relief rally that will surely surprise many. We believe that this rally will be tradable, but be ready to quickly switch allegiances once the downside pressure is relieved. This market has not yet created the even better buying opportunity we believe will emerge.

Monday, May 22, 2006

The Pick Up in Volatility is Great News

Over the past year the US dollar has been under increasing pressure and has been losing value against measures such as gold and major foreign currencies. During this time stocks have been essentially trading in a tight trading range and apart from a bit of strength during October and November of last year, volatility levels have been extremely low. We believe that the low volatility and the trading range environment masked a larger correction that had been taking place. Stocks were rising nominally in dollars, but when measured in Euros or in gold the indices have actually been in decline since December. Last week a sharp decline took on momentum unlike anything the market has seen in nearly five years. Expected oversold rallies never developed and selling progressed on heavy volume without relief. During this sharp sell off something interesting happened though, the VIX (a volatility measure) rallied sharply higher. Now, the VIX measure is fairly difficult to understand, but for the purposes of this report, understand that an increase in VIX indicates an increase in market volatility. So, in plain language, what has been happening over the past year is that the market has been in slight decline, but the decline has been masked by a weakening dollar. The combination of this led to very low volatility levels as measured by the VIX, which was also seen clearly by the narrow trading range. Now that the VIX has rallied sharply higher we can confidently say that volatility levels are picking up. In fact, the jump in the VIX has very real similarities to the 1994 market. This is very good news for us. A tight trading range is one of the most difficult market environments to navigate as buy/sell programs round out the extremes stopping rallies before they get started and stopping plunges before they plunge. In this type of environment it becomes ever more difficult to determine what is market noise and what is real demand. Recall what happened as volatility increased during the 1994 market. That year trading opportunities once again improved dramatically and preceded a huge bullish move that lasted over the next five years. We will discuss more of these implications over the next week. Right now, understand that we are now in a much better trading environment than we have been in for quite some time.

Friday, May 19, 2006

Cash is King

Taking the current market conditions and framing them with a historical perspective a relief bounce is overdue. Likewise, using that same historical frame of reference, due to the extreme oversold condition the indices are now in the relief rally should be strong. The problem over the last few days however has been that too many people have been looking for just that relief rally. Too much bottom fishing has been taking place. It works like this: traders trying to buy the bottom tick before the bounce that everyone anticipates will buy as stocks trade near their daily lows. When stocks subsequently drift even lower stops get triggered and selling compounds. In other words, the bottom fishers are fueling the market's decline. So, theoretically we are very close to a bounce, but if too many people continue to bet on this then the market could be in real trouble here. Ironically, trying to buy the bottom tick before prices reverse, is becoming more and more risky the further the market declines. Why? Because some have been buying quite heavily into this decline and if the pain eventually becomes too great for them and they are forced to stop out the dam could burst and what started as a correction could turn into a crash. We are by no means predicting a crash. What we are trying to point out however is that trying to enter before the turn confirms itself is the best way to lose money in the market. Once the market capitulates there will be plenty of time to take advantage of the relief bounce. Stocks and markets just do not reverse in "V" type patterns leaving those who did not buy the bottom tick behind. Be patient here and be in cash until we have confirmation that the selling is drying up. As of Thursday's close, we have no evidence that buyers are regaining control.

Thursday, May 18, 2006

The Bounce that Never Arrived, Will

Yesterday was a rare day when the crowds ended up being right about the market's direction. Support levels on the Dow and S&P cracked while the Nasdaq trailed off even lower. Put contracts purchased en masse over the last few days are deeply in the money. Keep in mind that Friday options expire and with stocks and indices more than oversold now it shouldn't be too difficult for options sellers to incite a short covering rally to at least recoup some of their losses. Put buyers would do well to take profits while they have them. Even so, this market remains a falling knife as of yesterdays' close. We can speculate that a turn is overdue but until that knife stops falling it is dangerous to get under it. A few potential bounce back plays are developing already and stocks that fell back on light volume should rally once the pressure eases. Other stocks that have fallen on heavy volume and that have broken their trends should be good shorts once they retrace some. In other words, opportunities abound in this market but we have to time them right. We are almost there.

Wednesday, May 17, 2006

Cash is a Position To

When we scan this market the only thing we see right now is a lot of ways to lose money. The refusal to capitulate has kept this market from a relief bounce and while we believe that we are very near a reversal this market still has a lot of falling knives. Until these knives stick in the ground they will continue to cut those who try and catch them. There are some tempting reversal set ups in the oils and industrial mining sectors but frankly we don't trust them. Selling pressure has been so strong over the last few days that support levels have not just been blown through, but gapped over. With a lot of trend lines broken and the Nasdaq crushing long term support we have to go with the idea here that the intermediate trend is down. Since surprises occur in the direction of the trend trying to buy a bottom in an expected relief rally too early can teach traders a very painful lesson. We have already learned this lesson so we remain sidelined here in this situation that just does not offer a very good reward for the risk that weighs. The fact that we are not getting any relief from selling pressure yet indicates that when the tide turns, we may get a very strong countertrend rally. This is why shorting is so dangerous right here; a lesson that the options crowd has not come to terms with. Options traders bought 5 put options for every call option yesterday betting on more downside from current levels. This tells us that a turn is very likely to come from these levels and perhaps could even occur today. Is it a good idea to buy now in anticipation of this turn? We would argue no. While indices may be ready to turn back up, at least for a relief move, a lot of stocks have sustained severe technical damage. Finding the stocks that will move back up significantly and the ones that will only tease you into a bull trap will amount to guesswork at this point. If we get a good strong capitulation day today or sometime this week, we will start to see some reliable set ups emerge. Until we get some capitulation or get a relief rally of some sort that sets up a better short play it is very important to calm down your urges to get back into the market here. This will be especially hard to do if you recently lost money. The worst thing you can do in this situation is redeploy your money too quickly in an effort to recoup losses. Keep the powder dry here because the patient will have some very strong trading opportunities soon. Try to get back in too early though and you will only find yourself further behind making it even harder to catch back up.

Tuesday, May 16, 2006

A Bounce Is Likely, but be Careful

Put purchases continue to be extreme indicating that a near term floor is likely in place. Yesterday the QQQQ found support at the neckline of a long term head and shoulders pattern and all major indices bounced as shorts booked their recent profits. Over the next couple of days we would expect to see the market move up in a countertrend rally as options sellers do their best to manipulate the market up to maximum pain levels hoping to make the contracts expire worthless. It is our opinion that this countertrend rally will not be tradable for anyone except those with the shortest of time frames. The path of least resistance for the near to intermediate terms is firmly down. It is our opinion that any countertrend rallies should merely be used to exit open long positions and to position into short trades. A lot of eager bulls will be ready to quickly step back into the market to regain recent losses. We believe that this will be a mistake. The strength of the recent sell off indicates that support levels we are now at will once again quickly come under attack. The best course of action at this time is to remain patient and to remain in cash while some of the oversold pressure is relieved. Recent selling is leading us to a very nice buying opportunity, but we are not there just yet.

Monday, May 15, 2006

Near Term Bounce is Due Early This Week

Options expire this week and traders are overweight on the short side so we would expect a pretty good floor to be in place this week. In fact, last week's heavy selling could snap back into a decent two or three day countertrend rally. We recommend using this rally to exit poorly performing stocks and for putting together your list of shorts. Last Friday's follow through selling appears to us to be overdone, but since we didn't get a late day bounce, set ups on either the long or short side are risky here. We recommend managing open positions today and taking a wait and see approach to the market as we begin the week.

Friday, May 12, 2006

We are Bullish Again; Sort of

As readers have noticed we have been bearish on the broader market for several weeks now. The Dow climbing while the Nasdaq lagged just didn't sit right with us. Likewise, it was very clear from our scans that stocks were not going up with the indices yet on the bad days stocks have been participating in droves. Yesterday's ugly day has been projected by the writing on the walls for some time for anyone willing to pay attention to the signs. When OEX traders bought five calls for every one put on Wednesday, we knew that the bottom was about ready to drop out. Options traders are by far the best contrarian indicator there is. When this group of not so lucky people get overly bullish like they did on Wednesday it is time to go short. So indeed the QQQQ broke its long term uptrend yesterday as we warned it might. Now the big question is what next? Well, the same group of options traders that were overwhelmingly bullish on Wednesday flipped to the overwhelmingly bearish side yesterday purchasing more than two puts for ever call. Their routine is almost comical in a twisted sort of way. Taking a bearish stance on the broader market over the next few months makes sense here but options are a time wasting asset. Their value depreciates over time and if you don't time the market just right your value goes up in smoke even as the market eventually goes your way. Taking a contrarian reading from this group of folks then we would expect to see the market, and specifically the QQQQs, find support very near yesterday's lows. In fact, this index ETF stopped right at its 200-day average. We may see it dip a bit lower today, but now is not the time to short tech. Bottom fishers very likely smell a bargain here and will buy beaten down stocks back up. When the market bounces it will be time to go short. We have drawn a likely scenario on this QQQQ chart:

Thursday, May 11, 2006

QQQQ Support in Trouble

The QQQQ is in real danger of breaking down from its long term trend this week. If the angels don't step in and save it now (angels are an investor's term for institutions that step in and buy weakness) we could see a major support break occur. With the Dow and S&P still rising on weak volume should the Nasdaq 100 break down here, things could get very ugly in the US markets. We are very happy to be nearly fully invested in commodities and in the foreign markets at this point. We don't know what will happen with the US markets over the course of the next month, but risk is very high there and it is best to be placing your money with the alternatives we outlined in yesterday's report.

Wednesday, May 10, 2006

Strong Bullish Trends if You Know Where to Look

There are a couple of huge bull markets taking place right now and most people are missing out. Nearly every commentator we read is still hoping against hope for a rotation into the tech sector. The rising Dow and S&P continue to entice investors in with promises of a new leg up in the secular bull market. As they patiently await their shares to start climbing they will grow increasingly as selling pressures continue to erode good set ups. The frog is getting cooked ladies and gentlemen. Most have heard how a frog if placed in a pan of cool water will eventually remain in the water too long to its own demise if the water is heated gradually. This is what is happening in the broader market right now. A few blue chip companies are propping up the major indices and stocks beneath the surface are slowly and efficiently experiencing distribution. Yesterday the Dow and S&P rose on sick levels of volume. Volume is the fuel that drives the market and right now the market is almost out of gas. Driving home this point are the advance decline numbers. As the blue chip indices rose more than half of the underlying stocks were actually in decline. Even worse the put/call ratio on the OEX had speculators buying 5 calls for every put! Generally a put/call ratio of 2 calls purchased against every put reveals an overly bullish sentiment. 5/1 is more than extreme. Today the FOMC meets and speculators are making a huge bullish bet. But as we stated, there are a couple of huge bull markets taking place and most are ignoring them. Gold sliced through $700 oz yesterday and gold stocks firmed up on very nice volume. As incredible as it may seem this market still shows signs of accumulation and not a blow off top. Sure there will be corrections, but these will be buying opportunities. Oil likewise continues to put in a bottom and it too will likely make a new leg higher over coming weeks and/or months. The other bull market though is in ADRs (American Depository Receipts). Europe and Asia have a number of stocks that are in real bull trends – of the type we haven't seen in the US markets for over a year. Risk is comparably low in these trends and the reward is very promising. We are excited about these opportunities and are already profiting from them while the average investor continues to slowly cook in the pot of stew that smart money is serving up for them.

Tuesday, May 09, 2006

Market Hangs On Today's FOMC. Maybe. It Depends.

What can be said about yesterday's trading other than that the volume was poor? Considering the fact that traders are awaiting today's FOMC meeting with bated breath we can forgive a poor volume day like yesterday though. Today's meeting has the potential to be a market mover if they can shed more clarity on their position for future rate hikes. Last week the market was roiled after a bit of miscommunication via the media sent mixed messages about the Fed's future intentions. Clarity then will move the market, lack of clarity will likely lead to more indecision.

Monday, May 08, 2006

Indices Look Good, but We Remain Cautious

The weekly views of all major indices are solid as we enter the phase of the market not known for a great deal of strength. Indices are moving up despite pressures from oil and a falling dollar that has gold threatening the $700 level. We frankly don't trust the rally in stocks here but we can also find no reason to try and stand in its way. If prices want to go higher, who are we to argue with them?

Even so, while there are some bullish charts the majority of set ups are risky and require chasing prices higher. We prefer to stay with commodities and foreign companies in the form of ADRs at this time in order to avoid the risk we perceive priced in to the broader US markets. There are some very nice solid trends in Japanese and European ADRs at this time and the risk is much lower and more manageable.

We believe that those who stubbornly attempt to run with the broader market at this time will find as we have for much of this year that more than a normal number of set ups will fail. Time will tell and if by the end of May it is commodities that have corrected and the Fed that has finally relented and seasonality has proven itself wrong this year, then we will relent and admit that we were perhaps overly cautious. We are not holding our breath.

Meanwhile, we are happy to remain with the strong foreign and commodities trends that do actually have some promise here.

Thursday, May 04, 2006

Bears Growled, but They Have no Teeth (yet)

Yesterday just felt nasty as the QQQQ pushed on support and stocks experienced demoralizing selling pressure. This caused a lot of people to buy put options in expectation of further declines. We said yesterday that a near term floor is in place and yesterday's action confirms this. Yesterday was very likely the dark that occurs before the dawn. The only major index that looks to be in real trouble here is the QQQQ. The SMH performed well and held its ground while the S&P and Dow held their highs. Will the QQQQ break down here? Not a chance. Put options purchased yesterday represent an overly bearish sentiment and the Qs are trading right at the support line on the trend that started three years ago. The market is weak here, but that support is not going to give way on the first attack. If today starts out weak, look for a strong intraday reversal to take place as support buyers step in and buy the weakness. If the Qs do break support today, the market is much weaker than we thought; but don't bet on it, at least not yet.

Wednesday, May 03, 2006

Temporary Floor In Place/Commodities Still Hot

The bulls were able to hang on after Monday's thrashing. A near term floor may in fact be in place here. Once again however the tech sector is lagging the blue chips. The Dow and S&P are trading at multi year highs and threatening a break higher while the Nasdaq and semi conductor indices are trading at support. Relying primarily on Japanese candlestick analysis, tech has support and should turn up from here. We have a feeling however that it will be pulled along by the strength of the Dow and S&P rather than move up on its own volition. Nevertheless, the long term prospects of the market don't appear to be in danger of breaking down just yet and we may in fact have a nice trading bottom in place. If the Nasdaq rallies weakly, it may set up a good short scenario, but let's not try and project too much here as the market is always full of surprises. A lot of people are looking for the metals sector to break down letting the money roll back into tech. We think that just the fact that so many are looking for this scenario to take place means that it will not. The market does a great job fooling the largest number of people; it always has and it always will. Some of the silver companies took a hit yesterday but this had more to do with nationalization threats from the country of Bolivia than it did on actual supply and demand for silver. In fact, the metal itself has a new ETF that lets those without commodities accounts to buy silver directly. Note that this ETF (ticker SLV) traded up yesterday as the mining companies lost footing. It may be that a lot of investors are rolling their money out of the companies, which in many cases are not fundamentally sound, and into the metal itself. Meanwhile gold, the metal, and gold mining companies kept right on climbing yesterday. The ETF (ticker GLD) is probably getting pretty close to a trading top, but a number of mining companies are still in the process of higher base building and we can find very few divergences that might indicate the miners are ready to break down. That other commodity that has everyone gnashing their teeth when they head to the pumps, oil, likewise continues to move higher. We believe that $70 will now act as the floor and that there is no end in sight for the climb in this sector. Pundits may be right, we may be on the verge of a rotation out of commodities and into tech but until we see it actually happen it all amounts to just so much wishful thinking.

Tuesday, May 02, 2006

Time to Get Rid of the Bad Blood

Yesterday the market left those who have been paying attention a not so subtle message. Recall last Thursday when the Fed Chairman's remarks sent market indices soaring off of support on high volume. You may also recall the fact that a majority of stocks did not participate in that ghost rally. Now, juxtapose Thursday's market reaction to yesterday's counter reaction, also spawned by remarks from a Fed Board member. When the market dropped back yesterday nearly everything participated. Many traders grumbled about the Fed making comments to the media, complaining that the Fed should be more careful with their words. We would point out however that the market was likely looking for an excuse to dump. As we all know stocks trading at multi year highs have recently been trading like they are stuck in the mud. We have argued that this is distribution slowly taking place. Yesterday confirmed for us that we were right; low breadth of participation on Thursday's rally, high breadth of participation on Monday's late day dump. Now we need to keep a close watch on the trend lines. As we pointed out a week ago, the weekly market trends were in tact and stocks were trading at support. Yesterday the QQQQ and Russell 2000 both closed right at their trends. The S&P and Dow are still trading a few points above their trends, but the Dow has very likely put in a top. Do we short? Not yet. As most everyone knows, picking a top in a bull market is risky business. You can be right in general, but not right specifically and if you don't have very deep pockets to ride out the bounces shorting tops can be very painful. The better risk-reward scenario is shorting the failed throwback rally, which often occurs after a trend break. Here's a good example: Note that after the blue up sloping trend broke, the price rallied back up to tag the underbelly of the uptrend. The price struggled at this level for two days and then gave way. As you can see, shorting the throwback is a much higher probability trade than shorting the breakdown. Should we be worried about a market decline here? Only if you are sitting on profits in your long term portfolio. In that instance you should be taking measures to protect those profits with trailing stops. As traders we should embrace these potential developments. With stocks losing momentum into their multi year highs, the number of trading opportunities that actually follow through and work for significant gains have been shrinking dramatically. A good washout is what the market needs to help reset new opportunities. Like Clemenza noted in the movie The Godfather: "This thing's gotta happen every five years or so, ten years, helps to get rid of the bad blood."

Monday, May 01, 2006

Energy and Metals Still Strong

If you merely focus on the index charts from a weekly perspective, we are right at support and ready to run higher. This is especially true on the S&P 500 and Dow. The tech sector however, while also at support, is showing signs of slowing momentum. We believe that this sector may once again lag the blue chips. Likewise, the small cap, Russell 2000 index is vulnerable for a correction. At this time it looks like institutional money is making way for a safe haven in the high liquidity blue chip stocks and it is avoiding high beta small caps and tech, but not necessarily selling these two sectors. Many commentators are looking for a rotation out of the energy and metal stocks as they believe commodities are overdone and likely topping. The truth is that the only true bull markets we are seeing right now are in energy and metals and trying to pick a top in a bull market is a recipe for pain. Market commentators will eventually be right in their calls for a rotation back into stocks from commodity-driven profits, but we believe that it is too early to make that call. We are seeing a great deal of strength in these two sectors at this time.