WEEKEND REPORT

We have emphasized to you recently it is more about the sectors than the indices as side by side, there continues to be bull and bear markets. On top of that, there have been fewer and fewer stocks and sectors working so dart throwing time is over. Let’s break it down.

Large continues to be better than small. While the bigger indices remain just above the 50 day average, the Russell remains below. IF the Dow and S&P now break below the 50 day, what has been a controlled and rotational correction could turn into something worse. Pay attention.

The financials remain below resistance and while they have yet to break another area of support, they have showed no upside ability recently. If financials do not move higher, it will be very tough for the market to move higher. If they move below support of the past few weeks, that will sure be the market taking out support.

The Transports remain weak and have shown no ability to get back above resistance.

The Semis remain strong as support held on Thursday with a few names breaking out Friday.

Autos everything continue to be mauled…dealers, manufacturers, auto parts, auto parts retail.

Still not feeling it in energy and commodities.

We know there is a lot of noise right now. It is important to recognize, it is not the news but how markets react to the news. This Thursday, earnings get going with a few important financial names. We will very soon know whether what we are seeing is nothing more than the pause that refreshes or something more troublesome.