Last week’s market action was tough and the best I can tell you is that we are starting to hit some sideways action. Not overly bullish and not overly bearish with new signals. Note that this is different than an expectation of the market changing trend or not having any gains. What I am talking about is the fact that I had 143 new UP signals and 139 new DOWN signals. For the past several weeks, the new UP to new DOWN ratio was running at about 4-to-1. So the evenhanded results of this past week, caused me to evaluate a lot of other fundamental and technical factors.

The net result of my research suggests that while there are less new leaders coming on board, I am not going to change my bullish bias. At least not yet because there still seems to be some run left in the stocks that have recently started to head higher. Additionally, the DOWN signals didn’t deteriorate much last week so I didn’t see a lot of incremental selling pressure. I have no clue how much longer the upward move will last but I am not seeing evidence of an impending decline.

From a sector perspective, energy and commodities are getting whacked and you have heard enough about that already from just about every source. My only comments are that money is coming out in a broad-based move from energy and commodities but it appears to be immediately reinvested in areas such as technology and not kept on the sidelines. The problem I have with energy and commodity stocks is their volatility. The moment that there is reason to push these stocks back in the upward direction, I expect a rapid move to reenter these sectors. Please be ready to respond because this is the first substantial pullback for quite a while.

Note that I am still reluctantly willing to change a few signals in consecutive weeks. I hate doing this zig-zagging and very rarely do so, but it was something I thought I had to deal with. Last week’s action caused me to change 9 signals for two weeks in a row and most of them were energy and commodities (go figure.) As I said, this market is getting tougher to evaluate and I am getting more aggressive until I see a picture that is getting clearer, not cloudier as it currently is.