Dr. Kris'  Instablog

3pm ET: Market Alert!: The "Sell in May" scenario may be kicking in!
Today's dramatic rise in the VIX and corresponding dramatic drop in the major averages lead by the DTX (a leader in market direction) could spell the end of the current rally. Long-term investors may wish to buy protective puts while traders should consider booking profits. Should the VIX close over 15, swing traders and bears may wish to initiate short positions or take positions in the levered bear etfs.

Here are some of the more popular 3x levered bear funds along with current approximate share price and today's percentage gains: Short Dow30 (SDOW, $40, +0.5%); Short S&P500 (SPXU, $23, +1.4%) and (SPXS, $10, +1.6%); Short Russell 2000 (small-cap stocks) (SRTY, $20, +3.8%) and (TZA, $32, +3.8%). These are all higher risk plays so please monitor them closely and set a mental stop-loss before you initiate a position. More conservative investors can use the unlevered total bear market fund (TOTS, $26, +1%). While the bears are playing, the bulls should be busy building their shopping lists for when the market turns around. Let's hope that's soon!

Subscriber Notes: There are no new entries as I'm waiting to see in which direction the market decides it wants to move.

4:00pm ET: Well, the major averages managed to hang in there to makr this the nineteenth successive Tuesday where they are closed in the green. However, the market leading Transport Index (DTX) was the noticeable laggard and the fact that the Trin and the VIX are both rising could spell timeout for the market in the near-term. Tomorrow, the ears of everyone on Wall Street will be pinned to Bernanke's testimony before Congress listening for any shred of a change in monetary policy. Market tone will be guided by the testimony and could either be very quiet or very volatile, depending on what's being said. Could be a profitable day for the day traders or a good one to sleep in. In remembrance of testimonies past, I might just do the latter.

Today's Market Highlights: Marine shippers on the move
The Guggenheim Shipping etf (SEA, $18) gapped out of a five month trading range yesterday on over four times normal volume. Not only did it handily break near-term resistance at $17.50, it also took out long-term resistance at $18. This etf is used as a proxy for the famed Baltic Dry Index which is viewed by economists as a leading indicator of future production and economic growth. The SEA has lagged the overall transportation index (the IYT is an etf proxy for this index) but it appears as if it's now trying to play catch-up. The shippers in particular have suffered much more than their land-based peers and investors are trying to rectify this situation.

Today's biggest movers were Genco Shipping (GNK, $2.10) and Frontline (FRO, $2.46). Both of these gained 17% and 12% respectively as investors piled in. Perhaps not so coincidentally, these two names are also the ones that saw the biggest drops in share value since their 2010 highs, down over 90% from their peak values. Although they're showing signs of life, they do face some near-term resistance--for Genco that's at $2.50 and for Frontline it's in the $2.75 to $3.00 range. A break above those levels could mean clear sailing for a while.

While Genco and Frontline appear poised for growth, they are not major holdings of the SEA. The fund's biggest holdings are foreign-based companies such as Maersk (16%) and several others which only trade on foreign exchanges. US exchange traded members include Navios Maritime and Teekay Tankers, both of which have more than one trading entity. For example, Teekay is listed under Teekay Corp (TK), Teekay Offshore (TOO), Teekay Tanker (TNK), and Teekay LNG (TGP). These are different businesses under the same corporate umbrella and detailing their differences is the subject of another article. My point today is just to alert you to the potential growth opportunity in this unloved industry group.

4:00pm ET: The market melt-up appears to have hit a cool spot as selling pressure heats up. At the close, the VWAPs (a measure of institutional buying and selling) on both the positive and negative sides were exactly equal and at elevated levels indicating that the bulls and the bears are duking it out. A pop in the VIX reflects the rising bearish sentiment. Two events this week could push this evenly-weighted bull/bear seesaw to favor one side.

The first is Fed chairman Ben Bernanke's testimony to Congress on Wednesday. This will be important in setting the tone for the markets (particularly the dollar, equities and US treasuries), as traders hunt for clues on when the Fed is likely to ease its rate of asset purchases. The second is the Durable Goods Orders coming out on Friday. Orders are considered a leading indicator of manufacturing activity and we'll need to see some good numbers as the recent Empire State manufacturing numbers and the Philly Fed numbers were disappointing.

Today's Highlights: Solar stocks continue to burn
On Friday we noted the breakout in the Guggenheim Solar etf (TAN, $25). Today, the Market Vectors Solar etf (KWT, $50) followed in its footsteps. The entire space popped on JA Solar's (JASO, $9.5) record earnings announcement showing huge demand for its solar cells in Japan. The news surprised everyone and boosted share price by a whopping 70% on nearly 29 times normal volume! As a rising tide lifts all boats, nearly every stock in the space experienced a surge in both price and volume. Other big winners include Canadian Solar (DSIQ, $9, +17%), LDK Solar (LDK, $1.8, +20%), Hanwa Solar (HSOL, $1.6, +31%), Trina Solar (TSL, $6.8, +20%), Renesola (SOL, $2.5, +18%), and Yingli Green Energy (YGE, $3.1, +13%). Volume on all of these issues has been expanding--a sign that investors and institutions are taking notice. Technically, the charts of YGE, TSL, LDK, and CSIQ are the most compelling, but as always, do your own research first. Adding one or two of these stocks (or one of the etfs) could provide that ray of sunshine that perks up your portfolio.