THE CLOSE

The major indices, by the close, ignored the carnage in the big financials. This is good news. As we have harped on, almost 50% of the market not participating and now we get many financials taking another leg down. This is to be kept in the file manager and remembered. BUT…WE CONTINUE TO SEE VERY LITTLE DISTRIBUTION IN THE AREAS THAT ARE WORKING. We will continue to accentuate those areas…namely semis, internet, tech, fiberoptics and the like. We will accentuate large over small as the small caps continue to lag. And that’s that.

Just keep in mind that market tops come from a narrowing of leadership until they finally come after leadership. Narrowing can last a good while though and until that occurs, one must stay with the good side. Have we ever seen a narrowing market that did NOT lead to a good correction. Of course…narrowing can start to broaden out again but after yesterday, the narrowing worsened and must be watched. If things changed to the good on the broad market, we will let you know. JUST STAY WITH THOSE AREAS THAT CONTINUE TO WORK AS WE ARE ACTUALLY SEEING SOME NEWER NAMES EMERGE.