WEEKEND NOTES

Just for today, will not discuss what IS working. We do that in just about every report as well as on our radio show. What amazes us is how many things are still not working. Those areas are not necessarily bearish but are certainly not bullish. Most are in different levels of not working.

UTILITIES remain gross. Interest-rate sensitive though 10 year remains below 3%.

HOUSING ditto.

HOUSING-related.

REITS were part of this trifecta but acting a little better.

GOLD and SILVER breaking badly.

OILS/ENERGY…we have told you recently that we thought they had topped but now things getting ugly. OIL PRICES look topped with many names breaking down.

SOLAR

SEMICONDUCTOR EQUIPMENT (AMAT, LRCX, MKSI, TSM, TER)

AEROSPACE/DEFENSE

CHEMICALS

MACHINERY

BIG FINANCIALS with JPM and BAC just holding 200 day average.

EMERGING MARKETS…have you seen EEM, EFA, FXI, RSX, EWZ, TUR?

INSURANCE

BIG BIOTECH (still a bunch of spec names working)

AIRLINES and CRUISE LINES were part of the ugly but with oil prices coming down, we are seeing counter-trend rallies.

FOOD, DRUG, BEVERAGE, TOBACCO, HOUSEHOLD PRODUCTS, ALCOHOL…though we think a decent near-term low has been put in…but overall, still gross.

The good news is the other half of the market still working…and now seeing a bunch of recent money losing IPOs go topside. Not sure that kind of froth is good news but so far, indices looking fine. Just amazed how much is not working.