WEEKEND NOTES

Not much has changed. In fact,  we can simply be repetitive with this report.

Continue with large caps over small caps. One glance at the Russell 200 versus the DOW, S&P, NASDAQ shows you why.

Continue to avoid ENERGY as it goes deeper into correction. Continue to avoid most RETAIL…horror show! Continue to avoid most COMMODITY names have STEEL,COPPER,ALUMINUM,GOLD,SILVER and all that stuff remain bearish. You can now avoid (except for bounces) most REITS as they have now turned down badly after they bounced into late February. Continue to avoid APPAREL. The good news is that except for a few more not so important areas, that’s it for the ugly right now.

The most bullish groups remain FINANCIALS and SEMICONDUCTORS but while the SEMIS look poised for higher here, FINANCIALS “feel” stalled for now, especially REGIONALS as they are back into the 50 day average. On top of that, our thoughts on HOUSING and BIOTECH emerging continue to play out but should only be looked at on pullbacks now, especially HOUSING.

Other areas of note:

CONSUMER STAPLES are still getting the bid as FOOD,DRUGS,BEVERAGE,TOBACCO continue to be strong with a few names on the verge of breaking out of range. Other HEALTHCARE remain strong and persistent.

A couple of things to pay attention to:

While major indices are just off highs, NEW LOWS actually outstripped NEW LOWS for a couple of days this week. That rates a big wow and tells you that underneath, not so good.

As we have stated, sentiment remains off the charts bullish and now INSIDER SELLING has hit levels we have not seen in decades. Do we dare say 1987? Just remember, sentiment is a secondary indicator. Price and volume first…everything else second. It is just important to watch because when the masses are all in on one side, it usually is  just a matter of time before markets move the other way…but until price moves, this stays in the file manager.