Still overbought near term.

First off:

Auto parts retail

Airlines

Internet travel

Defense

Tobacco

Alcoholic beverages

Food

Gas Utilities

Cruise lines

That’s basically the relative strength as we head into earning’s season. Most of these areas were the relative strength before the August trashing and right now, they are back where they were. There is nothing really breaking out of range on humongous volume…just that they have held up better in a treacherous market.

As we stated over the weekend, markets would deserve a pullback here as we are into the declining moving averages as well as massive overhead resistance. At this juncture, a pullback would not be a big deal. Just keep in mind, with 75% of the market still in bearish shape, pullbacks had better be controlled.