Dr. Kris'  Instablog

4:00pm ET: It appears as if the market's two day break is over as all of the major averages closed the day in the green. Internals are signaling that the bulls are back in control. Despite a fall in volatility, the VIX (volatility index) is on the positive of side of 12 giving this rally more room to run. I still think we'll see the SPX test the 1650-1670 projected resistance (the exact number is determined by the current P/E estimate). As this will be a major point of resistance, the SPX could make several runs at it before breaking through.

Today's Notable Market Action: Is solar a good bet?
Big action was seen today in many issues but most notably in the makers of solar panels. The Guggenheim Solar etf (TAN, $21.55) rose over 6% to break out of a one year base. Contributing to today's move were major constituents First Solar (FSLR, $49) and Sunpower (SPWR, $18) which comprise 19% and 5% of the funds equity holdings. Both of these stocks rose to new yearly highs on expanding volume, moving 10% and 5% respectively.

But are these companies worth a buy? One author at the Motley Fool thinks that while top-line revenues are increasing, margins are shrinking due to stiff competition and falling chip prices. If you're thinking of adding some sunshine to your portfolio, you should definitely read <a href= beta.fool.com/liorc/2013/05/10/is-it-wor... >this article before making a decision.

Since this space is fairly crowded, some consolidation is probably in order such as what recently happened with Power One (PWER). Personally, I'd rather take advantage of falling margins and stiff competition by investing in Elon Musk's Solarcity (SCTY, $29) which essentially makes its money by selling power generated by solar panels (provided free to homeowners) back to the power grid. As long as electric companies are forced to buy home-generated power, the Solarcity model should remain viable.

That's it for now. May your weekend be full of sunshine and good weather!

4:00pm ET: As predicted the Dow Transport Index followed through on yesterday's sell-off and lead the rest of the pack on the way down. Internals are growing increasingly bearish as evidenced by a rising VIX and Trin. In addition, many individual issues that have enjoyed big gains during the spring rally showed signs of weakness as buying pressure virtually dried up (re: topping tails for you technicians). For the bulls to stay in power, though, a little respite is required, so don't you bears start nipping from the honey pot just yet!

Today's Trade Highlights: A Yen for Japanese Stocks
Today's biggest news occurred in the currency markets which saw some big ups as well as big downs. On the upside, the greenback (UUP) jumped by 1%. I know that doesn't sound like much but in the currency realm, that's a huge move. Correspondingly, international bond funds WIP, BWX, IGOV, and BWZ all shed 1% of their values. Continued upside in the US dollar was forecast by Keith McCullough of Hedgeye and reported here on 4/29 (scroll down to view).

On the flip side, the Japanese Yen (FXY) broke recent support at $98.50. Judging by the triple topping tail (see above weekly chart of the FXY), further downside is in the cards. The exchange traded issue has support at the $5 levels making $95 it's next test. Considering Japanese Prime Minister Abe's vow to weaken the currency, I think it's entirely possible we'll see a retest of the 2008 low at $90.

Although this is bad for folks long the currency, it's good (in general) for most Japanese companies. We mentioned taking long positions in Japanese stocks in the March 11th and April 11th blog posts. Today we're adding two more stocks to the list: Fuji Heavy Industries (FUJHY)and Softbank (SFTBY). The former company is involved in the automotive, aerospace, and industrial machinery industries while the latter is a telecom and internet service and equipment provider. Fuji's stock chart has been a rising juggernaut and continues to hit new highs; Softbank's rise hasn't been so smooth but it leapt to a new high today gaining nearly 6%. As always, please do your own research before investing in any stock.

For those of you who would prefer a basket of stocks, consider the Japan country fund (EWJ, $11.76) or better yet the Wisdomtree Japan Hedged Fund (DXJ, $49.20) which has the advantage of being able to hedge against Yen/Dollar fluctuations. Comparing the two, the EWJ has gained nearly 40% (which ain't too shabby!) since the November low while the DXJ rose almost 60%. Both vehicles currently yield over 1% and both offer options.

That's it for now. Sayonara until tomorrow.

4:00pm ET Another banner day for the bulls as the S&P 500 (SPX), the Nasdaq, and, most importantly, the market-leading Dow Transport Index (DTX) reached all-time highs. Both the small-cap Russell 2000 (RUT) and the Dow Industrials (DJIA) are having problems breaking through near-term resistance. For the Russell that level is at 960 and for the Dow it's 15000. Leadership from the transports is indicating that these resistance levels may be toppled as early as tomorrow. Both the VIX (volatility index) and the Arms Index (Trin) indicate that this market still has room to run in the short-term.

Today's Notable Market Action: Airlines continue to soar
Domestic airlines continue to fly higher and technically show no sign of leveling off. It seems as if there's an etf for virtually everything and one would think there would be one for the airlines. Well, Guggenheim did have one (ticker symbol FAA) but they closed it a couple of months ago. So, the only way to get in on the action is to buy the individual names.

Most of the airline issues are now trading at P/E's on par with the S&P 500's P/E (15-17 range).Southwest Airlines (LUV) P/E is 28, quite a bit higher than the rest of the field. I'm not sure why this is so; they may be better at hedging their fuel costs and expanding margins but this is just a guess. Although LUV's chart is still very bullish, I'd rather pack my money into Alaska Air (ALK). The company sports one of the lowest P/E's (15) in the industry and technically it has a great looking chart. Today, the stock broke out to a new all-time high on twice normal volume. As always, please do your own due diligence and know your risk tolerance before investing.

Subscriber Notes: There are two new Stock Darlings.